Whatever Happened to Royal Mint Gold?: The Rise and Stall of British Blockchain Innovation

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In 2016, the Royal Mint announced the
launch of a digitised token for trading gold
called RMG (Royal Mint Gold). Each token
would represent one gram of physical gold
in a move that was set to place the UK at the
vanguard of blockchain innovation and the
fledgling field of tokenised assets. It has
since lost the support of its main partner,
American financial market firm, CME Group,
and disappeared from the agenda. So, what
happened?

Earmarked for the beginning of this year, “market
conditions” were deemed unsuitable for the launch of RMG
and the project was shelved until further notice. However,
market conditions, adverse or otherwise, have done little to
stem the tokenisation of precious metals elsewhere, with
similar projects in Switzerland, the US and Australia all
ploughing ahead regardless.

As much as $1 billion worth of digital gold tokens were to
be made available for trading on CME’s blockchain-based
platform whilst the software developer BitGo was charged
with building RMG a multi-signature cryptocurrency wallet.
Pitched as a cutting-edge way for investors to trade the
gold held in the vaults of the 1,100 year-old institution,
RMG was proposed not only as a tidy revenue stream for
the Mint but also as a vital bid to maintain its relevance in
rapidly changing times.

The decline and fall of Royal Mint Gold began with the CME
Group’s early exit from the project following a leadership
reshuffle, as unnamed sources confirmed to Reuters;
“CME’s management changed, and they walked away,
didn’t want to get involved,”

From there, the Mint decided to salvage the situation by
enlisting a cryptocurrency exchange to facilitate RMG
trading and it was at this point that the Ministry of Finance
stepped in, pausing the process. Royal Mint Gold now
hangs in an uncertain stasis as JP Morgan, Swiss firm
Tiberius and the Perth Mint all race their own gold-backed
tokens to market.

RMG was in the pipeline long before its rival stablecoins,
so why was the MInt prepared to throw away such a
promising lead?
Whilst the UK is often trumpeted as a world leader in
fintech development, it’s regulatory authorities, specifically
the FCA, have been painfully slow to adapt to the advent of
cryptocurrency. Decentralised cash systems are often
considered warily as tools for terrorists and criminals, their
secondary markets teeming with scammers, yet little is
being done to bring them in from the cold. Perhaps the
most obvious explanation for this is ambivalence; the
blockchains on which cryptocurrencies are built offer
tremendous technological opportunity but also pose an
existential threat to almost all centralised concentrations of
institutional power.

It’s possible that this ambivalence has bred a level of risk
aversion bordering on timidity which has, in turn, been
allowed to hamper a project as seemingly promising as
RMG. The cost to the British taxpayer of its government’s
RMG U-turn is quantifiable but the negative effect it has on
the UK’s fintech sector may prove immeSPAM BANble.

Source : https://thefintechtimes.com