According to an independent agency, the Law Commission, the UK can accept crypto currencies by introducing a new category of personal property that would cover digital assets.
The Law Commission stated in a research commissioned by the government that non-fungible tokens (NFTs) and digital assets like cryptocurrencies do not fall under the conventional definitions of personal property.
As was to be expected, the Commission suggested adding a third class of “digital objects” to the two existing classes of personal property, “things in possession” (physical assets like gold) and “things in action” (such as debt or stock in a firm).
The group recommended that a committee of experts be established by the government to advise courts on matters of law pertaining to digital assets.
The Law Commission said in a statement that these actions will help the UK government achieve its goal of becoming a major worldwide hub for digital assets.
Digital assets are now used and valued more than ever, according to Sarah Green, the law commissioner for common and commercial law.
The legal system in England and Wales is well-positioned to accommodate this rapid expansion due to the common law’s adaptability.
When Rishi Sunak was the finance minister in April 2022, he stated that he planned to make Britain a centrerfor crypto asset technology. He requested that the Law Commission examine whether current legislation can account for digital assets.
The Law Commission chose to use a scalpel rather than a sledgehammer when making their suggestions. Many people in the sector will find this comforting, according to Adam Sanitt, knowledge director at Norton Rose Fulbright, which contributed to the paper.
The government’s goal to turn the UK into a tech hub would be supported, according to Sanitt, if the proposals are carried out. This would give holders of crypto assets additional protection.
Additionally, the Commission stated that there was insufficient legal certainty about collateral agreements involving cryptocurrency assets and advised the government to create a special legal framework to support such circumstances.
According to the analysis, there is a very high level of demand for such legal reform among consultees, market actors, and industry organizations.
