The Treasury has asked the Royal Mint to create a non-fungible token, or NFT, as it attempts to show Britain is at the cutting edge for new technologies by launching its own cryptoasset.
It said the chancellor, Rishi Sunak, had asked the 1,136-year-old institution to create the NFT – a type of unique digital asset stored on a blockchain, the same decentralised ledger of transactions used to buy and sell cryptocurrencies such as bitcoin – so it could be issued by the summer.
The government said it intends to legislate to bring stablecoins – digital assets usually pegged to a fiat currency such as the pound or the dollar – into its regulatory regime, meaning issuers and services providers offering such products in the UK would need to follow rules set by UK authorities.
Last month, Ukraine announced it would issue NFTs to help pay for its military after the Russian invasion of the country. The global NFT market reached $25.5bn (£19.4bn) last year, according to DappRadar, a firm that tracks sales, in a dramatic rise from $100m in 2020.
As with bitcoin and other cryptocurrencies, some economists have said the craze bears the hallmarks of a speculative bubble despite its potential as a powerful and innovative new tool for artists, musicians and publishers.