Crypto Frontline

April brought some very positive news for the NFT (non-fungible token) industry, with the UK government issuing its own NFT token by the summer. Aside from the fact that the media is granting these tokens extra exposure, it is also adding to the legitimacy of this relatively new concept.

According to MetabaseNFT, a marketplace platform dedicated to NFT transactions, interest from the side of the UK government shows that these assets can serve multiple purposes. At the same time, there might be scope for friendly regulation, in case more public institutions end up following on the same path. 

Royal Mint and a government-backed NFT

Based on an article published by the Independent a few days ago, Chancellor of the Exchequer Rishi Sunak has ordered the creation of a UK government-backed NFT. The Royal Mint would be in charge of the process and the token could eventually be traded online. 

John Glenn, the Economic Secretary to the Treasury and Sunak’s deputy, spoke at a financial technology conference on Monday, April 4th, labeling the NFT as “an emblem of the forward-looking approach we are determined to take”.

As one of the newest forms of digital ownership, NFTs are a trending topic in the blockchain space. Platforms like MetabaseNFT, for example, provide customized services for people who want to buy or sell NFTs, benefiting from a simple user interface. It is now possible for anyone to sign up for an account and gain access to the NFT market, where a wide array of attractive assets can be found. 

NFTs have a floating value, just like other digital assets such as Bitcoin or Ethereum, which explains the potential of speculative interest. Since the first NFT was created in 2017, a large expansion can be noted, despite many not understanding exactly how this industry works. 

NFT market stalls – growth potential still intact

Despite the positive news coming from the UK, the NFT market is not on a one-way street to the upside. The first quarter of 2022 saw valuations retreat from the all-time highs, a move regarded by some experts as a burst of a bubble. 

Therefore, volatility should be expected in the near term, according to experts working for MetabaseNFT. “This an emerging market, liquidity remains thin, and price action moves are being driven by emotional reactions, rather than fundamental changes,” they explained. 

Non-fungible assets such as paintings or sculptures have outperformed over the past two decades, but their high value makes it difficult for small buyers to get involved. The emergence of NFTs creates affordability for a larger base of users, as they can easily purchase assets with a relatively low value. 

Governments to focus on blockchain solutions?

London remains one of the most important financial hubs and because regulation is friendly, the NFT market can continue to grow from there and outward. The UK government has already shown interest in borrowing money using blockchain technology, and the first NFT due to be released this summer has the potential to be an important milestone. It comes at the right time since bullish sentiment in NFTs is now weakening.