The government should introduce new legislation to reform laws for cryptoassets, according to a state-backed legal analysis.
The Law Commission, which was tasked with conducting an analysis of how UK law could accommodate digital assets, has recommended reforms that include establishing a legal basis for a new and distinct category of personal property compatible with the unique features of digital assets such as NFTs or stablecoins.
In its report, the group said that England and Wales are well-placed to provide a “coherent and globally relevant regime” for digital assets.
However, the commission made recommendations to “provide market participants with legal tools that do not yet exist” to successfully implement this regime.
It also called for a panel of industry-specific technical experts, legal practitioners, academics and judges to offer advice to courts in future cases.
“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,” said Professor Sarah Green, law commissioner for commercial and common law.
“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.”
Andrew Griffith, the economic secretary to the Treasury, said that the UK’s reputation for “straight dealing, use of the English language” and “flexible common law” is what attracts businesses from overseas.
“This, combined with our straightforward approach to regulating cryptoassets puts the UK at the vanguard of innovation to drive growth in digital assets and boost our economy,” Griffith added.
Earlier this year, the CEO of Coinbase said he admired the UK’s regulatory regime and suggested that while nothing was planned, if frustrations with US regulators continue, a move to Britain could be in the company’s future.
While chancellor, Prime Minister Rishi Sunak outlined a vision to make the UK a “global cryptoasset technology hub”. Plans involved new legislation to promote the use of stablecoins and the Royal Mint creating an NFT, the latter of which was quietly scrapped in March.