The UK Law Commission Calls for Wider Recognition of Digital Assets
- The UK Law Commission intends to provide stronger legal standing for cryptocurrencies and digital assets in the UK and Wales.
The Law Commission of England and Wales has recommended a series of legal changes to give cryptocurrencies and digital assets more legitimacy and legal security. The crypto industry is expanding and increasing its userbase. In response to this growth, the British government tasked the UK Law Commission to evaluate the current policies relating to cryptocurrencies and digital assets to make new provisions to accommodate the growth. The institution has called for public opinion from crypto users, tech experts, and legal practitioners.
The UK Law Commission is a legislative body established by the Law Commissions Act of 1965, with the aim of advancing legal reform. It is a nonprofit advisory organization, supported by the Ministry of Justice (MoJ).
The Commission’s proposal emphasized how cryptocurrencies, nonfungible tokens (NFTs), and other digital assets are constantly changing and have multiple use cases. Since it first emerged over a decade ago, cryptocurrencies have taken on new roles in the financial space. They serve as a medium of exchange and a store of value. These digital assets are also used to digitally represent ownership of items.
The UK Law Commission, through its proposal, wants to provide wider recognition and legal protection for digital assets. According to the institution, this would encourage more individuals, organizations, and institutions to participate in the developing market. The consultation document explored how personal property laws apply to digital assets and explained why these assets ought to be categorized under this area but in a different way.
The institution outlined four vital suggestions, the first of which is to clearly define a distinctive legal category of personal property to account for the special characteristics of digital assets, which it termed “data objects.”
Furthermore, the Law Commission of the United Kingdom and Wales proposed that authorities develop a variety of options for the expansion and application of these “data objects” on existing laws.The final two suggestions put forward by the institution were the provision of clarity on laws covering the transfer of digital assets as well as the control and ownership of these assets.
The proposal corresponds with the government’s plans for England and Wales to become leading nations in cryptocurrencies and digital assets. The Law Commission has set a deadline of November 4, 2022, for the public to respond to its consultation document.
The Commercial and Common Law commissioner, Professor Sarah Green, released a statement, emphasizing the institution’s commitment to providing a better legal framework for digital assets by focusing on their uniqueness. She said,
Our proposals aim to create a strong legal framework that offers greater consistency and protection for users and promotes an environment that is able to encourage further technological innovation.
British authorities have stepped up their bid to accommodate digital currencies. However, the government intends to introduce regulations on the industry to curb excesses such as financial crimes.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
