The UK must develop laws that govern cryptoassets to ensure the country becomes a global hub for cryptocurrencies and non fungible tokens, the Law Commission recommended.
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 independent panel said in a statement Wednesday. The report will now go to the UK government, which will decide whether to adopt the recommendations.
The UK Treasury announced its ambition to become a global crypto hub in April last year, launching a spate of legislative proposals to regulate cryptoasset businesses and attract investment to the country. Updates to the English and Welsh legal system could make it the default choice for the crypto sector if sufficiently prioritized, figures like Judge Geoffrey Vos have suggested, adding to the UK’s appeal.
The report also urged the government to clarify if and when digital assets can be considered as money under existing rules for use as collateral. The market participants must be given the legal tools to provide “new ways to take security over crypto-tokens and tokenized securities,” the commission said.
The panel also called for legisaltion to confirm the existence of a distinct third category of personal property to better accomadate digital assets.
Prime Minister Rishi Sunak’s government should form an expert new panel of includes industry experts to advise on a technical and legal framework for the digital assets, it said.
