In response to the news that the UK government is planning to make the UK a global cryptoasset technology hub;

Amrit Dhami, Associate Analyst in the Thematic Research team at GlobalData, comments:

“On its own, the Royal Mint’s planned non fungible token (NFT) is more a symbol rather than a significant asset in itself—much like a commemorative coin. Beyond this, the government appears committed to creating a stable, regulated environment for the growth of cryptoassets, recognizing that the preferred payment methods among consumers are indeed changing.

“Sunak’s measures are sending a crystal-clear message: before cryptoassets become part of British financial services, they’ll need to be well cushioned by airtight regulation. It is ideal to start with stablecoins, which are—as the name suggests—far less volatile than cryptoassets such as Bitcoin. Introducing them as a widespread payments option may be an ideal way to get the average consumer accustomed to the crypto concept.

“Similarly, a central bank digital currency (CBDC)—or, ‘Britcoin’—would be more reliable than privately issued cryptoassets such as Ether and Bitcoin. It’s not just the Bank of England—central banks across the world, from China and Japan to the US, are currently looking into developing CBDCs. Further, the Chancellor is already looking into tax reforms to accommodate Britcoins.

“However, further legal questions and financial concerns will need to be addressed before tangible things can actually start happening in this space. For instance, if consumers start investing in stable CBDCs, instead of keeping their money in commercial banks, how shall the fall in deposits be mitigated for banks? There are also, of course, cybersecurity concerns surrounding state-run digital currencies.”