In a plethora of countries bitcoin and its brethren have been taken with a pinch of salt both by regulators and institutional investors, e.g., in China, South Korea, and, recently, in India. However, it is not every country that meets cyber money craze skeptically.
In particular, the United Kingdom government-owned Royal Mint, which makes coins for the whole nation as well as keeps the gold reserves, decided to jump on the crypto bandwagon as some other enthusiasts. In this case, the mint decided to develop its own crypto token backed by gold.
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It might sound like what Venezuela is currently trying to do – launching national digital coin petro supported by oil reserves – but there are several differences.
- Firstly, a new token will not be the UK national crypto-coin but the currency, emitted by UK’s mint.
- Secondly, it will be backed by ore – gold.
- And, thirdly, it will be done not for the purpose of saving the country from the hyperinflation and economic crisis (like in Venezuela’s case), but for business goals.
Official Gold-Backed Royal Plans
Tom Coghill, who is a representative of Royal Mint’s RMG department, revealed in December 2016, specifically, told Express.co.uk that this idea should not be surprising as the mint already vends material gold via Royal Mint Bullion business and not only. On top of that, the mint sells other coins as well as bars for making profits.
Tom Coghill. Image Source: express.co.uk
“In this sense what we’re doing here is simply making that a digital business and allowing for our clients to be able to hold gold for the first time on a blockchain basis,” said Coghill.
At the same time, the representative emphasized that UK mint’s coin issuance will have a peculiarity, different from other cases. And that is the palpability of the Royal Mint’s digital asset.
“One gram on our blockchain represents one gram physically in our vault,” explained Coghill.
Lots of people have already claimed that gold as a store of value has outdated itself and another means for that should be found. Cryptocurrencies could be a great substitute, but Coghill said this remains to be found out with time.
Meanwhile, UK is not the only country which decided to create crypto backed by ore. Another example is Australia, whose Perth Mint declared about similar plans last week, according to reports of regional media outlets.