UK Law Commission Proposes Reforming the Crypto Rules to Help UK Become Global Leader
In their latest proposal, the UK Law Commission announced that the UK government shall develop laws governing crypto assets thereby ensuring that the country becomes a global hub for cryptocurrencies and non fungible tokens.
In a statement on Wednesday, June 28, an independent panel representing the UK Law Commission said 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 Law Commission will submit its proposal to the UK government which will later decide whether to adopt the recommendations. In April last year, the UK Treasury expressed its goal to become a leading global center for cryptocurrencies. They introduced several laws to regulate crypto-related businesses and attract investment to the country.
By making necessary updates to the legal system in England and Wales, experts like Judge Geoffrey Vos believe that the UK could become the preferred choice for the crypto industry, further enhancing its attractiveness.
In its report, the UK Law Commission has urged the government to clarify its stand on digital assets and whether they shall be considered money under the existing rules for use as collateral.
The Commission believes that market participants should be given legal tools to provide “new ways to take security over crypto-tokens and tokenized securities”. The panel also suggested the need for new laws that recognize a separate category of personal property to effectively accommodate digital assets.
Over the past decade, existing laws in the UK have been adaptable, but as the digital asset market and technology evolve, there is a growing legal uncertainty in this field. The government has recognized the expanding range of digital asset applications and is actively seeking to maintain its position as a global leader and hub in this sector, despite fierce global competition.
Speaking on the current development, Professor Sarah Green, the Law Commissioner for Commercial and Common Law, explained: “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.”