The UK Law Commission has demanded comprehensive legislation on digital assets and whether they classify as money for use as collateral.
In their recent recommendation, the UK Law Commission has stressed that the country should develop laws governing crypto assets to ensure that it becomes a global hub for cryptocurrencies and non-fungible tokens.
In a statement on Wednesday, June 28, the independent panel noted 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 report has been forwarded to the UK government which will take the final call on whether or not to adopt the recommendations. In April last year, the UK Treasury expressed its desire to establish itself as a leading global hub for cryptocurrencies. It introduced several legislative proposals to regulate crypto-related businesses and encourage investment in the country.
Notable figures, including Judge Geoffrey Vos, have indicated that updates to the legal system in England and Wales could make the UK the preferred destination for the crypto industry, further enhancing its attractiveness.
UK Law Commission Seeks Clarity on Digital Assets
In its report, the UK Law Commission has asked the government to clarify its position on digital assets. They want to know whether the government would treat them as money, and for use as collateral under the existing rules.
Regulators across the world are trying to bring some clarity on how they treat crypto assets. Last week, Federal Reserve chair Jerome Powell said that they would recognize stablecoins as money.
The UK Law Commission also added that market participants should have the legal tools to provide “new ways to take security over crypto-tokens and tokenized securities”.
The panel recommended the introduction of legislation to officially recognize a separate category for digital assets as personal property. It further suggested that Prime Minister Rishi Sunak’s government should establish a new panel comprising industry experts to provide guidance on the technical and legal framework for digital assets. Last month, a UK panel compared crypto trading to gambling activities.