The UK Law Commission has published a consultation document proposing that “crypto-tokens and cryptoassets” fall into a new property category. The document follows an initial report sent to the Government in June 2023 as the UK’s crypto regulations evolve.
The UK Law Commission says cryptocurrencies can be brought into the common law system of England and Wales if they are recognized as a third category of property.
The UK considers technical aspects
The Commission says a new category of personal property could “better recognise, accommodate and protect the characteristics of digital assets”. He suggests that courts enlist an industry committee to reverse engineer new cryptographic complexities to ensure the legal system responds sensitively “to the complexities of emerging technology.” It also recommends that a multidisciplinary team help market participants better protect their assets.
The Commission first recommended last June a category of “digital objects” to complement two other categories of property.” This recommendation came after Prime Minister Rishi Sunak assessed the suitability of current laws. Before becoming Prime Minister, Sunak had said he wanted to make the UK a crypto hub.
The new legislation appears partly aimed at satisfying these ambitions. The Commission stated this in a summary of its latest proposal.
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Cryptocurrency Awareness in the UK | Source: UK FCA
“Our recommendations also support the government’s aim to attract technology development to consolidate England and Wales’ position as a global financial hub for crypto-tokens and crypto-assets,” the government body said.
So far, the UK has several cryptocurrency companies registered in the region. These include Archax, Ziglu, Gemini, Fidelity Digital Assets and Zodia Custody.
How the UK is promoting cryptocurrency regulation
The new bill adds another piece to the UK’s crypto regulations. The UK already treats cryptocurrency trading as a regulated financial activity, following Royal Assent to the Financial Services and Markets Bill last year. Subsequently, Financial Conduct Authority rules required cryptocurrency advertisers to market only through authorized companies.
Treasury Economic Secretary Bim Afolami hopes to accelerate the regulation of stablecoins and cryptocurrency staking over the next six months. Regulators in South Africa, the United States and Hong Kong may also come up with new regulations on stablecoins this year. Bank of England governor Andrew Bailey said last year that full regulation could arrive by April 2024.
Meanwhile, the Bank of England has struggled to find a value proposition for a central bank digital currency. His proposal that “Britcoin” deposits do not earn interest at banks and limits on how much each family and individual can hold have failed to convince UK citizens.
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This indifference, combined with recent economic contractions and developing crypto regulations, could cause the region’s CBDC ambitions to falter. BeInCrypto has contacted the UK’s Financial Conduct Authority, the awaited watchdog for the cryptocurrency industry, but has yet to receive a response as of this writing.
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