Given the failed partnership with the U.S. exchange group, CME and the government’s veto on the plan, Britain’s Royal Mint will not be launching a digital gold token. This further reflects government’s wariness towards cryptocurrencies and associating itself with it after the stellar rise of bitcoin last year depicting how largely unregulated the market is.
The chances of Britain’s Mint surpassing other mints and fintech startups which are racing to set up similar products to build gold into a multi- billion dollar digital asset class; are bleak. Enthusiasm towards digital assets at the CME also seems to cool down according to sources.
In 2016, Royal Mind Gold had announced its plans to issue tokens worth up to $1 billion to give investors an easier way to buy and trade physical gold held in its vaults; on a blockchain- based trading platform run by CME with the official launch in autumn of 2017.
Once CME’s management walked away last minute, the Mint was left without a trading venue. Britain’s finance ministry refused to permit the Mint to partner with a cryptocurrency exchange in early 2018 to save the project as it considered it a gamble not worth staking the government’s and the Mint’s reputation.
Most governments are skeptic when it comes to cryptocurrencies. In order to tame extreme price volatility, regular thefts from exchanges and the risk that digital currencies could be wrongly used to finance crime, terrorism or launder money; some international standards have been developed.
However, the finance ministry, central bank and financial watchdog in Britain are still contemplating whether cryptocurrencies need to be regulated and the use of blockchain technology in finance.
The Royal Mint whose core business has been slumping, was hoping to attract investors wanting digital assets but with the reassurance of a trusted issuer. It wanted to create a new revenue inflow as use of mass circulation coins. It fit into a push by CME which has been investing in digital technology startups as a venturer. CME was one the first to launch bitcoin futures contracts last year.
However, a change of strategy led to CME pulling out of the Mint’s project which could have been due to the change in priorities after the retirement of CME’s CEO Phupinder Gill in late 2016 and the quitting of its head of digitization, Sandra Ro according to a source.
While Mint’s project is now frozen, there are others launching rival products such as Australia’s Perth Mint and the Royal Canadian Mint that are committed towards digital gold products that launched last year and trade with the help of technology provided by fintech startups.