The UK Law Commission has submitted its proposal to the government to provide a comprehensive legal foundation for digital assets.
As crypto adoption grows in the UK, lawmakers have started demanding a proper law base governing digital assets. The UK Law Commission has proposed having proper crypto rules to make the country a global hub for digital assets and non-fungible tokens.
In a report on Wednesday, June 28, the independent panel of the Law Commission noted that the long-awaited recommendations “aim to provide a comprehensive legal foundation for digital assets, which will allow these new technologies to flourish, enabling a diverse range of market participants to interact with and benefit from them”. The UK government has now to decide further whether to adopt the recommendations of the Law Commission.
Last year in April, the UK Treasury announced a similar goal of making the UK the global crypto hub. Judge Geoffrey Vos has suggested that prioritizing updates to the English and Welsh legal system could make it the preferred option for the crypto sector, further enhancing the attractiveness of the UK.
As the digital asset market and technology evolve, there has been an increase in legal uncertainty. The UK government is aware of this and is actively seeking ways to maintain its global leadership and position as a hub for digital assets, despite strong competition from other countries.
UK Law Commission Seeks Clarification on Digital Assets
The UK Law Commission has also asked the government when digital assets can be classified as money under the existing rules, or be used as collateral. The Commission also argued that the market participants should have the legal tools to provide “new ways to take security over crypto-tokens and tokenized securities”.
Professor Sarah Green, the Law Commissioner for Commercial and Common Law, explained the need for changes in the digital asset space in the UK. She said:
“The use and importance of digital assets has grown significantly in the law few years. The flexibility of the common law means that the legal system in England and Wales is well-placed to adapt to this rapid growth. Our recommendations for reform and development of the law, therefore, seek to solidify the legal foundation for digital assets. We also aim to ensure that the private law in England and Wales remains a dynamic, globally competitive and flexible tool that enables further technological innovation.”
The panel also recommended creating laws to officially recognize a separate category of personal property specifically for digital assets. This would help provide better support and accommodation for digital assets within the legal framework.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
