Crypto assets need new rights in law, says UK legal body

A stock chart is seen with a representation of bitcoin in this illustration taken March 13, 2020. REUTERS/Dado Ruvic/File Photo

LONDON, July 28 (Reuters) – Britain should create a new class of private property law for digital assets such as cryptocurrencies that are used to make payments or represent other assets, proposed on Thursday the Law Commission.

Authorities around the world are taking steps to regulate the crypto asset industry, which has grown rapidly and has been dubbed the “Wild West” by European Union lawmakers. Read more

Cryptocurrencies, such as bitcoin, rose in price in 2020 and 2021, but fell sharply this year. NFTs – blockchain-based assets that represent digital files such as images, have also proliferated rapidly. Read more

Rishi Sunak said in April, when he was finance minister, that he wanted to make Britain a global hub for crypto asset technology. He asked the Law Commission to consider whether current laws can accommodate digital assets.

The Commission said on Thursday that many digital assets, such as non-fungible tokens or NFTs, do not fit easily into current private property law.

“Our proposals aim to create a strong legal framework that provides greater consistency and protection for users and fosters an environment capable of encouraging new technological innovation,” said Sarah Green, Statutory Commissioner for Commercial and Common Law. .

The Commission has proposed adding a third category of ‘data objects’ to existing ‘things in possession’, or tangible assets such as gold, and ‘things in action’, such as debt or shares in a business, personal property categories.

To fall into the new category, a digital asset must consist of electronic data and meet other criteria, such as being used by only one person at a time, the Commission has proposed in a document submitted for consultation. public.

Britain introduced a bill last week giving its regulators powers over the use of stablecoins in payments, with further consultation on regulating other types of crypto assets due later this week. year.

The crypto market has fallen sharply in recent months, with $1 trillion wiped from the global cryptocurrency market capitalization since early April, based on data from CoinGecko, as the prospect of a rise Federal Reserve rate cuts to combat high inflation prompted investors to abandon riskier assets.

Reporting by Huw Jones and Elizabeth Howcroft, editing by Jane Merriman

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