Law Commission proposes the acknowledgment of cryptocurrency as an asset
The Law Commission of England and Wales has taken a step forward by initiating a consultation on proposed legislation that would classify cryptocurrencies and NFTs as property. In a report, the independent statutory body emphasized the significance of personal property rights, particularly in cases of insolvency or unlawful interference, and acknowledged the unique challenges posed by digital assets. The commission has called for public feedback on this initiative, with a deadline for submissions set for March 22.
Unlike traditional physical or rights-based assets like debts and financial securities, digital assets do not fit neatly into existing personal property categories. This necessitates a reevaluation of current legal frameworks. To address this issue, the Law Commission is seeking insights for its ongoing project on digital assets and electronic trade documents within private international law. Submissions for this project are due by May 16.
Sarah Green, the commissioner for commercial and common law, highlighted the hurdles posed by the digitization and decentralization of assets in relation to current private international law mechanisms, particularly in addressing jurisdictional and legal conflicts. The aim of the consultation is to gather experiences and challenges faced in commercial and legal practices involving digital assets and electronic trade documents.
The feedback received will play a crucial role in shaping the final proposal of the crypto as property bill, which will be considered by the government. It will also inform subsequent phases of legal reform efforts, especially in light of the recent enactment of the Electronic Trade Document Act in the United Kingdom, which facilitates the digitization of trade documents.
The Law Commission’s consultation is a significant step towards providing clarity and legal recognition to cryptocurrencies and NFTs as property. By addressing the unique challenges posed by digital assets, the commission aims to ensure that the legal framework keeps pace with technological advancements in the digital economy.
