By
Bhushan Akolkar
March 21st, 2024
A plan to create a crypto asset representing physical gold holdings proposed by Royal Mint was blocked by the UK government.
Earlier this year, the Royal Mint, the institution responsible for producing the UK’s coins and holding gold, has attracted the attention of the crypto community when it was announced that the organization was launching its own digital currency.
As CoinSpeaker has already reported, this blockchain-based coin is known as Royal Mint Gold (RMG) and it is backed by gold. So, one RMG coin’s value is equal to the value of one gram of gold.
Royal Mint’s Plans
The Royal Mint firstly revealed its plans to issue digital gold tokens worth $1 billion in equivalent in 2016. These RMG tokens were to be traded on a blockchain-based trading platform managed by U.S. exchange CME. The Royal Mint even chose the company to develop RMG’s multi-signature crypto wallet (it was tech firm BitGo that specializes in blockchain technology).
The launch of these gold-backed coins had several purposes. First of all, it was aimed at providing investors with a simplified way to purchase and trade the physical gold that is held in the Royal Mint’s vaults. Secondly, selling tokens could be an additional revenue flow for the 1,100 year-old institution.
Originally, it was planned that the RMG projects would be launched a year ago but as the Royal Mint lost its trading partner, it was impossible to start the project realization.
It is believed that CME left the project as its management had changed; nevertheless, this information was revealed by some unofficial sources. The Royal Mint’s attempts to find a new trading partner were unsuccessful.
UK Government’s Veto
Nevertheless, the situation with its partnership with the CME Group is not the only failure that the Royal Mint has met. As it has been recently disclosed, the U.K. government “vetoed a plan to have the tokens trade on a cryptocurrency exchange.”
A spokesperson of the institution confirmed the information that RMG plan would not be carried out in the nearest future. Nevertheless, it was explained that they are still open for new proposals and it is possible that the project will be restarted.
The spokesperson commented the situation the following way:
“Over the last few years, The Royal Mint has been working on the development of a digital gold product, RMG, which was due to launch this spring. 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.”
Though the hope to realize this project is still alive, due to such a delay, the U.K. will lose the position of a pioneer that it should have had if the Royal Mint had managed to fulfill its first plan to issue its gold-backed coins in time.
Now its counterparts from Australia and Canada have already presented their variants of the RMG token. Nevertheless, it is unclear whether their tokens can boast great attention from the side of investors.