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Chancellor Rishi Sunak is to launch a non-fungible token (NFT) – a type of cryptocurrency asset – through the Royal Mint as part of a drive to make the UK a “global cryptoasset hub”.
The government plans to introduce a range of measures for the notoriously unregulated cryptocurrency sector, which features incredibly volatile currencies such as Bitcoin.
It is starting with the easier end of that world with so-called “stablecoins” – cryptocurrencies whose values are pegged to existing traditional currencies (pounds, euros, etc), rather than the whims of the digital market.
The move to recognise “stablecoins” is intended to pave the way for the use of them as a recognised form of payment.
Read more: NFT fraudsters making millions by wash trading, new study finds
What are NFTs?
NFTs are a token of ownership attached to a blockchain. Their proponents claim they are a unique asset class, while critics say the token is fundamentally valueless and bad for the climate.
Despite this debate, more than $44bn (£32bn) worth of cryptocurrency was sent to NFT-related smart contracts last year, up from just $106m (£78m) in 2020, according to a new report published by Chainalysis.
Chainalysis, which offers a blockchain data platform for law enforcement and other organisations, has published a study identifying the scale of wash trading to artificially increase the value of NFTs.
Wash trading is a market manipulation tactic that gives the impression a financial instrument is in more demand than it actually is by trading it for higher and higher prices between accounts operated by the same actor.
Read more on NFTs in our explainer here.
What does the chancellor want?
Mr Sunak will be working with the Royal Mint on an NFT “this summer”.
It comes as the Treasury plans to “ensure the UK financial services sector remains at the…
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Source : skynews
