In April, the U.K. government got a lot of attention when a high-ranking official said that the country might make its own tokens that can’t be exchanged for cash (NFTs).
Rishi Sunak, the former finance minister, asked the Royal Mint, which makes British coins, to make NFTs to represent the country’s “forward-looking strategy.” But we still don’t know what the NFTs would be made of or how they would look.
A non-fungible token (NFT) is a digital token that is based on the blockchain and can be attached to a physical item, like a piece of art. Industry experts say that for a government-issued NFT to work, it would need to include both the utility and the community. The NFTs could give people access to events or even a chance to meet the queen.
The Royal Mint said that it is making a variety of NFTs, but it wouldn’t say if the tokens could be used for something else. Since a new prime minister and cabinet will be chosen on September 5, it is not clear how seriously the United Kingdom takes cryptocurrency.
Different people in the industry have different ideas about how much a Royal Mint NFT should cost.
Neil McFarland, CEO of U.K. NFT and metaverse startup First Light Games, said, “Let’s charge one for 10 million British pound sterling ($12 million) … maybe you could get a week’s holiday with the queen. Don’t underestimate how eager people are to show off their money.”
It makes sense that McFarland wants to charge millions of dollars for an NFT. The world of NFT is full of lavish displays of wealth, and in the past few years, a few of them have sold for millions of dollars. Pak’s “The Merge” artwork, which started at $575, sold in December for $91.8 million, making it the most expensive NFT ever sold. “Everydays: the First 5000 Days” by Beeple made history when it sold for $69.3 million in 2021.
According to Nonfungible, the average price of an NFT sale has gone down by 16.2% over the past year, to $415.
A U.K. government NFT couldn’t just be for billionaires because that would leave out the vast majority of people. McFarland said that the U.K. might make NFTs for people with different levels of income, but that even 50 British pounds sterling ($58) might be too much for some people because food and energy prices are going up.
“I’m not sure.”“But my question is that are NFTs meant to be used by governments to raise money from their citizens? I’m not sure,” Gauthier Zuppinger, who helped start Non Fungible and provides NFT data, said.
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Pedro Herrera, a senior blockchain analyst at DappRadar, a decentralized application store, says that an NFT’s success comes down to how useful it is. Popular art NFT collections, like the Bored Ape Yacht Club, give their members access to real-world events, limited-edition items, and free NFTs.
“How are they going to reward their owners for being part of their collection, of their community?” Herrera asked.
As Zuppinger said, the government of the United Kingdom could give out NFTs for special events, or it could offer discounts on train tickets, as Herrera said.
For some people in the industry, it would be good for the UK to issue collectable NFTs that aren’t connected to utilities.
Robby Yung, CEO of Animoca Brands, a venture capital company for blockchain-based game providers, said: “We’ve seen the Royal Mint issuing collectible coins for generations, and there’s no reason why they shouldn’t do the same in an NFT format and embrace a new generation of collectors.”
Yung said that a collectible NFT could be used to mark important events like the Queen’s Jubilee or could be exchanged for real money. Royal Mint has collectible coins that range in price from 20 British pounds sterling ($23) to 10,165 British pounds sterling ($11,838.62).
Zuppinger said that community is another important part of a successful NFT, but that most people in the UK may not know enough about NFTs to connect with them well.
Users must build a digital wallet and keep their private keys safe as part of the long process. Zuppinger said that decentralization is not for everyone.
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