UK Commission clarifies Crypto Property Law
The UK Law Commission has now proposed changes with the intention of clarifying exactly what crypto property laws are. Amid the crypto regulations, the UK Law Commission wants to inform about exactly how property laws apply to cryptocurrencies in England and Wales.
The Law Commission of England and Wales’ consultation document had revealed the proposal to place digital assets and non-fungible tokens (NFTs) under the UK property laws.
The UK government plans to form and initiate a regulatory framework for cryptocurrencies which is currently unavailable.
Having an established and “robust” legal basis in a “favorable” environment will be appropriate for all crypto stakeholders and is an agenda for the Commission.
Commercial and Common Law Commissioner, Sarah Green has mentioned,
Digital assets such as NFTs and other crypto-tokens have developed and spread at great speed, so it is important that our laws are adaptable enough to accommodate them.
Crypto tokens and NFTs play an important role in society
The British Law Commission has mentioned that digital assets such as crypto-tokens and non-fungible tokens which are special blockchain tokens have particularly important roles in modern society. According to a post by the Law Commission, the UK government has been given a responsibility to review the law to ensure that digital assets are taken into account.
This is because digital assets will continue to develop and expand as stores of value, forms of payment, shares or debt securities. The crypto-friendly proposal is partly designed to help the UK government achieve its mission of transforming the country into a global crypto hub.
However, the Commission’s proposal will not apply in Scotland or Northern Ireland, as they cater to their individual legal systems. Last week, the financial regulator proposed rules to parliament that would recognize stablecoins, which are asset-backed cryptos and legal tender.
Related Reading | UK lawmakers seek input on regulation of digital assets
The government intends to enter into consultations on crypto as an investment vehicle
Stablecoin regulation is on the table for the UK, and the government is also planning a consultation on crypto as an investment asset by the end of 2022. With this consultation document, it will welcome opinions and views from legal and technical experts.
The Commission will stay away from cryptocurrencies that are only used as means of payment. The focus area will be on digital assets that can be traded and they are used to represent other assets and also act as a store of value.
The consultation document also mentions that current property laws cannot adequately include digital assets, as they have “many different functions” and “unique qualities” compared to traditional physical assets.
The Commission cites that
The law must therefore go further to recognize these unique characteristics, which in turn will provide a strong legal basis for the digital assets industry and for users.
To fit in with digital assets, the Law Commission is proposing the creation of a new category called “data objects”. These will take into account things that consist of data in electronic form such as databases, software, digital records, domain names and also crypto.
There is supposed to be a third category that will have a more detailed account of new, upcoming and distinctive things according to the document.
Suggested Reading | Stablecoins to become a payment tool in the UK, with regulation in the works
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