The Law Commission of England and Wales has recently decided to review and update the law. According to the recent paper published, they want to revise the property rules for the NFTs(Non-Fungible Tokens) and cryptocurrencies.
There are chances that the definition of digital assets as personal property would make it quite simpler for crypto investors to claim their losses through any scams or hacks like the loss of private keys.
The UK Law Commission Views Cryptocurrency As A New Form Of Property
According to the Law Commission Sarah Green, “Many crypto community members invest in Non Fungible tokens or the crypto tokens, but no one ever asks what would happen if things go wrong”. If the system fails or someone hacks the wallet, the owner cannot access its crypto tokens.
To avoid such problems, the UK Law Commission has proposed to help the government make the UK a global hub for web3 applications. This rule would apply to the UK excluding Northern Ireland and Scotland, which have independent governments.
During a parliament meeting, the financial regulator recommended a new protocol to make stablecoins a legal means of payment. The government is planning to take a consultation on crypto as an investment class asset in Q4.
As per the consultation paper, they invite tech and legal experts to put their views. The government focuses on different possible use cases of cryptocurrencies rather than using them as the mode of payment. The portrayal of an item as a tradeable asset is one of the areas they are open to exploring.
The study also argues that current property rules are difficult to apply to crypto and digital currencies. Because most of them are different from physical assets.
According to the law commission, the law will be changed to include these qualities and provide a legal foundation for any cryptocurrency or digital asset. Additionally, there are currently two categories of personal property: “Things in Action,” such as legally claimed firm shares, and tangible things, such as gold ornaments.
To incorporate the digital assets, the commission has proposed to create a new asset class called date objects. It would account for all the digital software, records, domain names, and cryptos. According to the parliament document, this third category would help create more precise crypto regulations.
They will begin researching DAOs after developing the digital asset regulations ( Decentralized autonomous organizations). Daos is a blockchain-based governing body that has no hierarchy system. It is quite useful to make independent decisions based on the votes of all the DAO members.
Such laws are required in all countries as many people are now exploring cryptocurrencies and spending a lot of their savings.