Author: Syedur Rahman 4 April 2022
The Treasury has asked the Royal Mint to create an Non-Fungible Token'>NFT to try and show that Britain is at the cutting edge of new technologies.
Chancellor Rishi Sunak has requested the NFT to be ready for issue by the summer, as part of what he calls “the forward-looking approach we are determined to take towards cryptoassets in the UK”.
As yet, the Treasury has not stated the image or object that would be part of the Royal Mint-created NFT. It has also not said whether more will be created in the future or whether NFTs may be used to generate revenue for the exchequer.
Critics may argue it is wrong for the Chancellor to devote efforts to creating an NFT at a time when the cost of living is making life harder for millions. Yet Sunak has stated this move is an attempt to position the UK as a global hub for cryptoasset technology. Part of this, he has said, will involve close oversight of this rapidly-developing sector.
With hackers and fraudsters already making widespread use of NFTs, there is little doubt that the sector needs to be regulated. Figures for last year have shown that the global market in NFTs reached a total of US $25.5 billion – up from US $100 million the previous year – which gives an indication of the need to ensure they are properly policed.
At a time when Ukraine has stated it will issue NFTs to help fund its military response to its invasion by Russia, it is clear that authorities around the world are acknowledging the potential of this new asset.
But regardless of whether the market in NFTs is here to stay or a bubble that is set to burst, it will be extremely difficult to root out and reduce the risks of money laundering and fraud associated with them without proper regulation or a robust legal framework. The Chancellor’s move to embrace NFTs is a positive step but it has to be accompanied by appropriate measures to protect those with NFT involvement from the criminals.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.