- UK’s Law Commission has proposed to legally define digital assets as personal property.
- Digital assets like cryptocurrencies and NFTs will be categorized under ‘data objects’.
- The proposal, in part, can help the government’s goal of turning the country into a global crypto hub.
While numerous jurisdictions have been uncertain about how to regulate cryptocurrencies, the UK government has tasked its independent statutory body for laws to explore how property rules can apply to digital assets in England and Wales.
According to the statement, such personal property will be categorized under ‘data objects’, to “accommodate the unique features of digital assets.” The independent body will also look into the options for how data objects could be optimized.
Lastly, the commission will also seek to clarify the law around ownership, control, transfers, and transactions around digital assets.
The commission posits that law reform is required while new technologies, such as digital assets, continue to emerge. Moreover, they suggest that the law would protect users and optimize the use of digital assets.
Sarah Green, the law commissioner for Commercial and Common Law, said, “it’s vital that our laws are adaptable enough to be able to accommodate digital assets.
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.
However, classifying digital assets as data objects implies the possibility of setting fines in cryptocurrencies.
“We provisionally conclude that there is an arguable case for law reform to provide courts with the discretion to award a remedy denominated in certain crypto-tokens in appropriate cases,” the commission wrote.
Notably, the commission said in a statement that the proposal, in part, can help the government’s push to turn the western power into a global crypto hub.
Green added, It’s important that we focus on developing the right legal foundations to support these emerging technologies, rather than rushing to impose structures that could stifle their development. By clarifying the law, England and Wales could reap the potential rewards and position itself as a global hub for digital assets.