In April, a high-ranking official in the UK government said that the country would make its own royal tokens that could not be traded with other tokens or NFT.
Former Finance Minister Rishi Sunak had asked the Royal Mint, which makes British coins, to make NFTs 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 must be both useful and part of a community. For example, NFT holders could get tickets to events or even a moment with the queen.
The Royal Mint said it is making a number of NFTs, but it didn’t say if the tokens could be used for anything else. Now that a new prime minister and cabinet will be chosen on Sept. 5, it is unclear how seriously the U.K. takes crypto.
The U.K. government wants to set up an NFT.
How much does it cost?
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 data shows that in the past 12 months, the average price of an NFT sale 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.
Services and the neighborhood
Pedro Herrera, the 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.
Herrera said that the U.K. government could offer discounts on train rides or NFTs for certain events. Zuppinger also said that the government could offer NFTs.
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 commemorate events like the Queen’s Jubilee or be used to redeem a physical coin. Collectible coins made by the Royal Mint cost anywhere from 23 pounds sterling to 11,838.62 dollars.
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 must make a digital wallet and store their private keys safely. Zuppinger said that not everyone is ready for decentralization.