Newsflash: UK Govt. Halts Royal Mint’s Plans for Gold-Backed Cryptocurrency

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The UK government has blocked a Royal Mint plan to create a “digital gold” token that would trade on a cryptocurrency exchange.

According to sources cited in Reuters, the British finance ministry refused to approve the 1,100-year old Mint’s plans to issue as much as $1 billion worth of “Royal Mint Gold” (RMG) tokens, which would have been backed by gold assets stored in the government-owned Mint’s vaults.

“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,” a Mint spokesperson was cited as saying.

Initially, The Royal Mint had planned to list the tokens on a blockchain-based exchange operated by U.S. derivatives exchange CME, which also manages the largest regulated bitcoin futures market. However, the CME backed out of the partnership just prior to the scheduled launch date late last year, delaying the project and forcing the Mint to pursue a cryptocurrency exchange listing to save the venture. That was a bridge too far for the finance ministry, who considered such a partnership too risky for the Mint, and, by extension, the government.

Without approval to move forward with the project, Mint CEO Anne Jessop — who was appointed in Feb. 2018 — shut the project down, leading to four employees being laid off and another 7-8 “made redundant.”

Had the full $1 billion in RMG been issued on a public blockchain, the token would have been numbered among the world’s most valuable cryptocurrencies. At current valuations, it would have ranked just outside the top 15 largest cryptoassets, trailing closely behind NEO and ethereum classic (ETC).

The sources cited in the report suggested that CME, which launched bitcoin futures in Dec. 2017 and has seen minor-but-growing volumes in this market, may be “cooling” toward this nascent asset class. “CME’s management changed, and they walked away, didn’t want to get involved,” one source told the publication.

CME, on its part, told Reuters that it was “continuing to assess client demand with our partner and have nothing new to report at this time.”

CCN had first reported the Royal Mint’s plans to create a blockchain asset back in 2016.

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Josiah is an assistant editor at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. He holds investment positions in bitcoin and other large-cap cryptocurrencies. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.