The United Kingdom Law Commission has released a consultation paper suggesting that crypto-assets should be classified under a distinct category of property. This move is part of the ongoing evolution of crypto regulations in the UK, following an initial report submitted to the government in June 2023.
The Commission argues that integrating crypto into the existing common law framework of England and Wales requires acknowledging it as a separate category of property. By doing so, it aims to better acknowledge, accommodate, and safeguard the unique features of digital assets.
To navigate the complexities of emerging technology, the Commission recommends establishing an industry panel tasked with interpreting crypto-related matters. Additionally, it proposes the formation of a multidisciplinary team to assist market participants in safeguarding their assets effectively.
Crypto Landscape and Regulatory Developments in United Kingdom
This initiative builds upon previous recommendations made by the Commission, including the proposal for a new category of “digital objects” alongside existing property classifications. Prime Minister Rishi Sunak, who expressed intentions to position the UK as a crypto hub, initiated the assessment of current laws before assuming office.
The proposed legislation aligns with the UK’s ambition to foster innovation in the crypto sector. Notably, the country hosts several crypto firms, such as Archax, Ziglu, Gemini, Fidelity Digital Assets, and Zodia Custody.
Progress in Crypto Regulations and Future Outlook
In addition to the existing regulatory framework that treats crypto trading as a regulated financial activity, the United Kingdom aims to expedite the establishment of regulations for stablecoins and crypto staking within the next six months. Similar efforts are underway in South Africa, the US, and Hong Kong, with expectations of new stablecoin regulations emerging this year
