The British Royal Mint has had to shelve its plans for a gold-backed cryptocurrency, after the government vetoed a plan for the tokens to be traded on a crypto exchange. The Royal Mint was due to launch Royal Mint Gold (RMG) back in 2017, but its partner – CME Group – pulled out at the last minute. The Royal Mint then decided to team up with a crypto exchange, much to the dissatisfaction of the British government.
Creating a Multi-Billion Dollar Asset Class
By digitizing the Royal Mint’s gold supply, the RMG project could have created a potentially multi-billion dollar asset class. People who are already invested in cryptos use crypto platforms and tend not to have a traditional trading platform. This means that they can’t invest in things like gold, oil, or other commodities. By digitizing gold and trading it on a crypto exchange, RMG would allow crypto investors to hedge their investment portfolio in a traditionally stable market – even more secure than the stablecoin markets.
Not the End of the Road
The Royal Mint hasn’t given up on its plans just yet. In a statement it noted that the time isn’t right at the moment, but it will revisit the project when the market conditions are favorable – presumably the next bull run. RMG might not be a viable project right now, but it’s certainly something to keep an eye out for in the future.
Blockchain Coming to Gold Markets
While it’s not exactly digitizing gold, blockchain is going to be used to help track the world’s gold supplies and reserves. The United States has noticed an increase in gold being smuggled from other countries entering its markets, so in a bid to stem the flow it’s employing the help of blockchain technology.
Gold Not Faring Too Well
Traditionally, investors used gold as a form of safe haven in times of market volatility, but gold markets have been in a slump lately. This has sparked the question of can Bitcoin become a replacement for gold over the long term. While Bitcoin is well known as “digital gold,” it’s still a highly volatile market with bigger swings than the gold market. Until this volatility smooths out, it’s unlikely that investors will move their gold holdings over to Bitcoin.
The Royal Mint is probably quite upset about the government’s decision, but at the end of the day RMG is primed and ready to go as soon as it changes its mind. It might not be long until we see RMG trading on crypto exchanges around the world, and we for one are excited to see that happen.