Considerations for the U.K. Government’s Royal Mint NFT Collection

Earlier in April, the U.K. government announced its plans to release its own collection of NFTs. This was made apparent after former finance minister Rishi Sunak urged the Royal Mint to develop NFTs to establish the country’s “forward-looking approach.” However, details of the collection are still up in the air months after the initial news. It is also important to note that a new Prime Minister is set to be chosen on September 5, as well as a new Cabinet.

While this came as a surprise, the general sentiment of those within the NFT industry is focused on two things: prices and utility. As for the costs of the tokens in this collection, there is still a significant split in the industry regarding the topic. “Let’s charge one for 10 million British pound sterling ($12 million)… maybe you could get a week’s holiday with the queen,” said Neil McFarland, CEO of U.K.-based NFT firm First Light Games.

“Don’t underestimate the willingness of people to show off their wealth,” he added. While it seems to be said jokingly, a large number of NFTs have actually been sold for exorbitant amounts. In December, “The Merge” NFT by digital artist Pak was sold for $91.8 million, making it the most expensive token to date. Its starting price was set at $575. Beeple’s “Everydays: the First 5000 Days” also made history in 2021 when it was sold for $69.3 million.

Given the current state of the market, however, NFT sales have fallen by 16.2% over the past 12 months. Moreover, NFTs with such high price points run the risk of excluding a significant portion of the country’s population. Hence, the Royal Mint NFT collection could offer various tokens that cover a wide range of income groups.

However, McFarland notes that even £50 would be too much for some given the price hikes of food and energy. NFT data provided by Non-Fungible’s co-founder Gauthier Zuppinger also posed a valid query: “But my question is that are NFTs meant to be used by governments to raise money from their citizens? I’m not sure.”

The utility is also an important component of NFTs, particularly if it aims to flourish in the long run, explained DappRadar senior blockchain analyst Pedro Herrera. “How are they going to reward their owners for being part of their collection, of their community?” he asked. Other prominent collections such as the Bored Ape Yacht Club attach exclusive perks to their NFTs following a purchase. These can include access to real-world events, limited-edition merchandise, and free NFTs.

With this, Zuppinger adds that the government-endorsed tokens could come with entry to specific events, while Herrera suggests discounted offers for public transportation. Yet, other industry members believe that the collection’s lack of utility could also prove to be a step in the right direction for the U.K. government.

“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,” furthered Animoca Brands CEO Robby Yung. These tokens could simply be used to commemorate significant events, much like the Queen’s Jubillee for instance. Another alternative is to trade them in exchange for the Royal Mint’s collectible coins, which have been seen to range between £20 and £10,165.

Zuppinger also points out that not everyone is keen to adopt decentralization. Individuals entering the NFT sphere undergo a somewhat complicated process from creating a digital wallet to safely storing their private keys just to get started. The general U.K. public may lack some understanding regarding this matter, which could eventually trigger the downfall of the planned NFTs.

Nonetheless, an update regarding the Royal Mint’s collection is yet to be released. The tokens were initially set to be launched by the summer. Part of this plan also includes the country’s vision to integrate stablecoins into its payments framework to solidify its goal of becoming a relevant crypto hub. Perhaps careful development and regulations are still being sorted out to ensure its success.

Source: CoinDesk