Politics

'A national embarrassment': Rishi Sunak's NFT plan has really not gone down well

Rishi Sunak has instructed the Royal Mint to produce an NFT - but critics argue he should focus on the cost of living crisis

Image of Chancellor Rishi Sunak

The chancellor Rishi Sunak. Image: Tim Hammond / No 10 Downing Street

Rishi Sunak has again been branded out of touch after asking the Royal Mint to create a non-fungible token, or ‘NFT‘, while the country grapples with the cost of living crisis.

The chancellor asked the 1,136-year-old institution to create the NFT as “an emblem of the forward-looking approach the UK is determined to take” in the sector.

NFTs are unique cryptographic tokens which cannot be replicated, and can serve as a certificate of ownership for digital artwork and other virtual goods. Their surging popularity has seen some NFTs sell for millions of pounds, and has created a large community of traders hoping to profit from the hugely volatile prices.

The market has seen a rise in scams, with one major NFT marketplace announcing that over 80 per cent of the tokens created with the site’s free tools were fraudulent. Some economists warn it may be a bubble.

Critics have slammed Sunak for the announcement, arguing that he should be focused on doing more to mitigate the cost of living crisis affecting millions of people across the UK.

His spring statement – dubbed a ‘mini-budget’ – was widely criticised for failing to do enough for those hit hardest by the crisis, as consumers saw their energy bills rise by 54 per cent.

https://twitter.com/RishiSunak/status/1510985313409245184?s=20&t=E1vLKfYrDBSD3jeL95bk7g

The decision to raise Universal Credit payments by just 3.1 per cent was particularly controversial. With inflation forecast to hit 8.6 per cent later this year, this amounts to a real terms cut. With payments already so low that the UN poverty envoy warned they breach human rights, campaigners say around 600,000 people will be pulled into poverty.

Sunak was widely mocked for his photo opp failures in the 24 hours following the mini-Budget. Now, in the wake of his foray into NFTs, shadow chancellor Rachel Reeves has called Sunak’s priorities “hopeless”.

https://twitter.com/RachelReevesMP/status/1511233966107508739

The NFT announcement came on the same day that Bank of England governor Andrew Bailey warned cryptocurrencies are the “new front line” for scams. Charity Positive Money was quick to point that out to the Treasury on Twitter, writing: “Hey @RishiSunak, it looks like you need to talk to the @BankofEngland governor.

“Trying to make the UK a global hub for crypto scams is a dangerous distraction from the multiple crises we are facing.

“And @HMTreasury buying into the NFT hype is a national embarrassment.”

https://twitter.com/PositiveMoneyUK/status/1511274740891148290

The chancellor is spending the Easter holidays with his wife at their £5.5million oceanfront penthouse in California, the Guardian has reported. 

Journalist Nadine Batchelor-Hunt also criticised the chancellor, tweeting: “Rishi Sunak announcing an NFT and flying to California after being told his Spring Statement is leaving 1.1m Brits – including 500k kids – falling into poverty is truly unreal”

https://twitter.com/nadinebh_/status/1510989393472933904

And one incredulous Twitter user responded to the Treasury saying: “Is there anything else happening in Britain right now you might want to offer urgent solutions for? A lot of families choosing between heating and food and disability care right now – can they eat this NFT? Use it for central heating? Power medical equipment?”

https://twitter.com/2ndalexhiggins/status/1510982435063967747?s=20&t=9t5EKU9tVxBiFEwFf2uyyw

The idea of a government NFT will also mystify many cryptocurrency enthusiasts, who view cryptocurrency as a radical alternative to government-controlled ‘fiat’ currencies.

https://twitter.com/LouisHenwood/status/1511072682422714368

Of course, the announcement also drew fervent speculation about the artwork that the NFT would accompany. Commentator Sam Freedman asked: “Is the Treasury NFT going to be a picture of Rishi failing to use contactless? Or maybe a series based on his collection of cars and houses?”

https://twitter.com/Samfr/status/1510980723095781383

Though the announcement may have baffled many, one Twitter user saw the genius of the plan, explaining: “This is all, of course, in preparation for Rishi offering everyone a free NFT in October to offset the next rise in energy prices”

https://twitter.com/AFrazzledScot/status/1510991671164604420

Announcing the plans, Sunak said: “It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.

“We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.

“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”

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