The UK government has put the brakes on a Royal Mint plan to issue a digital gold token, as it is still wary of cryptocurrency in general. The plan also failed in part because an initiative with CME, a US exchange group, didn’t come to fruition.
Some governments have yet to make any official move toward cryptocurrency, and the UK, known for being hesitant on such issues, has confirmed that it is still not ready to take this sort of plunge.
With the rise of well-known digital currencies such as Bitcoin, there has been a significant increase in interest around what other technologies and capabilities could come about as a result, with aspects such as blockchain also making an impressive rise in the last couple of years.
The project was set to be groundbreaking, as no digital token exists in a mainstream capacity for a metal or commodity thus far. In that respect, Royal Mint Gold (RMG) would have been a major leap in both technological advance and faith.
Given the current lack of regulation in the crypto world from a worldwide perspective, there is an unwillingness for the UK government to greenlight the project, however, this does not mean that it has shelved the idea permanently.
Nations such as Japan and Australia have seen far more success in easing cryptocurrency measures into their technology and general mainstream activity as they look to become forerunners on the scene. However, not all countries are quite as prepared to join them.
Gold is one of the next commodity types that may become a digital asset, and the movement itself is worth billions of dollars. However, with interest from CME having receded on exploring digital assets in general, the floor will now open to the hundreds of capable fintechs that are looking to make a market entry.
Some analysts and traders believe that the UK would have been the first government of any developed economy to have directly stepped in and worked with a crypto exchange.
The Mint launched the original plan back in 2016, and the 1,100-year-old institution had planned to release $1bn worth of digital tokens on the CME platform, which would have been based on blockchain. It claimed that this would have enabled people to buy gold digitally, store it in physical vaults and tie it to an asset value.
Although originally planning to release the token late in 2017, CME pulled out due to a change in management, and the new directors have no plans to continue with the same project. This left RMG without a trading venue, and the plan collapsed.
The Mint hoped to rescue the deal by partnering with a crypto exchange, but the UK government vetoed this move. At the time, it said that this was too much of a risk, given its reputation for financial prudence and that of the Mint for reliably producing currency.
Fully owned by the UK government, the Mint confirmed in a statement: “Sadly, due to market conditions this did not prove possible at this time, but we will revisit this if and when market conditions are right.”