Personal property law should be reformed to better recognize digital assets such as cryptocurrencies and non-fungible tokens (NFTs) in response to their growing popularity, the Law Commission of England and Wales has said.
The Commission has released proposals that suggest creating a new category of personal property in the law to accommodate crypto assets, including cryptocurrencies such as Bitcoin.
The proposals also suggest clarifying the law on ownership of digital assets, tentatively saying that the concept of control rather than possession could be applied to crypto assets.
The Law Commission said it believes crypto tokens can be considered appropriate objects subject to property rights and that existing rules regarding transfer of ownership could be applied to assets when it comes to transfers and crypto asset transactions.
The Commission said legislative reform was needed to recognize and protect users’ rights as well as to maximize the potential of digital assets.
He said further consultation on the subject was needed because, as crypto assets are not tangible, they have different characteristics from physical assets and therefore do not fit easily into current categories or definitions of copyright law. private property.
He argues that the proposals could help the law better recognize their unique characteristics and could help create a stronger legal foundation for the industry in the future.
Professor Sarah Green, Law Commissioner for Commercial Law and Common Law, said: “Digital assets such as NFTs and other crypto-tokens have evolved and proliferated at high speed, so it is vital that our laws are sufficiently adaptable to accommodate them.
“Our proposals aim to create a strong legal framework that offers greater consistency and protection to users and fosters an environment capable of encouraging new technological innovations.
“It is important that we focus on developing the right legal foundations to support these emerging technologies, rather than rushing to impose structures that could stifle their development.
“By clarifying the law, England and Wales could reap the potential benefits and position itself as a global hub for digital assets.”
The Commission has now called for responses to its consultation, asking that they be submitted by November 4.