As of Thursday, the UK Law Commission would like to classify crypto and NFTs under the section of property rules, a consultation paper confirms. This would turn digital assets into personal legal property, making it easier to take legal action in case of hacks or scams.
The UK government has the intention of changing the country into a global crypto hub. To hold to that, they also came up with a proposal to recognize stablecoins (asset-backed cryptocurrencies) as a mode of payment. What is more, the government has more plans to regulate stablecoins.
In the consultation paper, the viewpoint focused on making cryptocurrencies assets as opposed to a simple mode of payment. As an asset, they would be tradable, they would be used to portray other assets, and they could also be used as a store of value.
At the moment, the UK property law has two types of personal property: ‘Things in possession’ and ‘Things in action.’ The issue is that digital assets do not properly fit into either type. So, the Law Commission wants to form a new category: ‘data objects.’ This would help cover most of the loopholes like crypto and digital records.
For the past year, the Law Commission has been engaged in drafting laws and rules for digital assets and is now halfway through. In 2021, the commission confirmed that UK laws can now adapt to smart contracts that can automatically execute digital transactions.
