In April, a high-ranking official in the U.K. government said that the country would make its own tokens that could not be traded with other tokens (NFTs).
Former Finance Minister Rishi Sunak had asked the Royal Mint, which makes British coins, to make NFTs to show the country’s “forward-looking approach.” But there are still no specifics about what the NFTs would be or how they would look.
An NFT is a unique digital token on a blockchain that can be linked to a physical asset like a piece of art. Industry experts say that for a government-issued NFT to be successful, it would need to be both useful and part of a community. For example, NFT holders could get tickets to events or even a moment with the queen.
When asked by CoinDesk if the tokens would be used for anything else, the Royal Mint said they were making an NFT range, but they wouldn’t say. Now that a new prime minister and cabinet will be chosen on Sept. 5, it is unclear how seriously the U.K. takes crypto.
How much it costs
The people in the industry have different ideas about how much a Royal Mint NFT should cost.
Neil McFarland, CEO of U.K.-based NFT and metaverse company First Light Games, said, “Let’s charge one for 10 million British pounds sterling ($12 million)… maybe you could get a week’s vacation with the queen.” “Don’t forget that people like to show off how much money they have.”
McFarland’s idea that an NFT should cost millions isn’t too far from the truth. In the NFT world, big displays of wealth are common, and some have sold for millions of dollars in recent years. In December, Pak’s “The Merge” painting sold for $91.8 million, making it the most expensive NFT ever sold. It started at $575. “Everydays: the First 5000 Days,” a piece of art by Beeple, sold for $69.3 million in 2021. This made history.
Nonfungible says that over the past 12 months, the average price of NFT sales has dropped by 16.2%, to $415.
A U.K. government NFT couldn’t just be for millionaires because that would leave out most of the country’s people. Different income groups in the U.K. could have NFTs, but McFarland said that even 50 British pounds sterling ($58) could be a lot for some people because food and energy prices have gone up so much.
“But my question is: Are NFTs meant to be used by governments to get money from their citizens? “I don’t know,” said Gauthier Zuppinger, co-founder of the NFT data provider Non Fungible.
Pedro Herrera, senior blockchain analyst at DappRadar, a decentralized application store, told CoinDesk that an NFT needs to be useful in order to do well. The Bored Ape Yacht Club is a popular art NFT collection that gives members access to real-world events, limited-edition merchandise, and free NFTs.
“How are they going to thank their owners for being part of their collection and their community?” Herrera asked.
Zuppinger said that the U.K. government could offer NFTs for certain events. Herrera said it could also help people save money on train rides.
Some people in the industry think it would be a good idea for the U.K. to issue collectible NFTs without utilities.
Robby Yung, CEO of Animoca Brands, a venture capital firm for blockchain-based game providers, told CoinDesk, “We’ve seen the Royal Mint issue collectible coins for generations, and there’s no reason why they shouldn’t do the same thing in an NFT format and welcome a new generation of collectors.”
Yung said that a collectible NFT could be used to get a real coin or to remember events like the Queen’s Jubilee. The Royal Mint makes collectible coins that are worth anywhere from 23 pounds sterling to 10,165 pounds sterling ($23 to $11,838.62).
Community is another important part of a successful NFT, but Zuppinger said that most people in the U.K. may not know enough about NFTs to take part in them in the right way.
The process takes a long time because users have to make a digital wallet and store their private keys somewhere safe. Zuppinger said that not everyone is ready for decentralization.