UK's Law Commission introduced four recommendations for the digital asset sector.
Recognizing the uniqueness of cryptocurrencies and digital assets, the UK's Law Commission advocated for a dedicated classification of personal property specifically for these assets.
This move has been proposed as part of the Law Commission's response to the British government's directive to explore how the legal infrastructure of England and Wales could adapt to handle cryptocurrencies, non-fungible tokens (NFTs), and other digital assets.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Monero? XMR Animated Explainer
The Law Commission proposed the new personal property classification for digital assets as a primary recommendation. Instead of offering rigid definitions, the commission prefers the UK's common law to dictate the specific digital assets that would fall into this category.
In an announcement, the commission believes that the introduction of a new personal property category would provide a "nuanced approach." This approach would accommodate a broad spectrum of digital assets, including cryptocurrencies and digitized certificates.
Another recommendation from the commission includes the assembly of a panel of experts. This group would consist of technical specialists, legal scholars, industry practitioners, and judges. Their role would be to provide "non-binding advice" to courts on diverse legal matters and considerations linked to the digital asset sector.
The Law Commission further suggested the creation of a "bespoke legal framework," ensuring efficient operation and enforcement of collateral agreements.
The final recommendation put forth involves adjustments to statutory laws. The goal is to provide clarity about which digital assets are covered by the UK's Financial Collateral Arrangements Regulations of 2003.
Apart from these recommendations, the UK Treasury and Home Office declared in March 2023 their intention to apply "robust" regulations to the cryptocurrency sector.
