The UK government has pulled the plug on plans that would have seen the Royal Mint launching its own cryptocurrency, amid fears over the unregulated nature of cryptocurrency markets, Reuters reported.
Previously regarded as an exciting development, both for the Royal Mint and for the cryptocurrency sector, the decision follows a breakdown in relations between the Royal Mint and its development partner, CME. As a result, the UK government vetoed plans to continue with the project, effectively ending efforts to develop a Royal Mint Gold cryptocurrency.
The plans would have seen the Royal Mint issuing digital gold in the form of a cryptocurrency, RMG. These would then have been available to trade on cryptocurrency exchanges, and had been seen by some commentators as the initial tentative steps towards a more central role for cryptocurrency in mainstream finance.
With several startups and other mints working on similar projects, the decision could now leave the UK and the Royal Mint trailing behind, effectively destroying its chances of creating a new multi-billion dollar asset class.
Sources familiar with the matter told Reuters the decision was initiated by a change of management at CME. According to the report, “CME’s management changed, and they walked away, didn’t want to get involved.”
After the Royal Mint attempted to partner up with a new firm, the Treasury reported vetoed the plans, citing the risks they could pose to the government and the reputation of the Royal Mint.
With the project expect to go live in spring of this year, the Royal Mint said the plans weren’t completely off the table. It stated, “Sadly, due to market conditions this did not prove possible at this time, but we will revisit this if and when market conditions are right.”
Governments have become increasingly wary of cryptocurrency projects of this kind, with concerns over the lack of global regulation and the frequency of hacks and thefts from major exchanges.
The project’s failure is a major setback for the Royal Mint, and for the broader digital gold use case. Until firmer regulation is in place, and improved security measures to protect against hacks, more projects of this kind may well follow suit.