The tectonic plates of UK crypto law are shifting29 Jun 2023 12:10
Two major developments within 48 hours.
⭐ Yesterday (28 June): The Law Commission recommends major law reform on Digital Assets.
⭐ Today (29 June): New law on the regulation of stablecoins gets Royal assent
The Law Commission is the UK’s leading law reform body. It makes recommendations to Government and Parliament for systematic law reform. Its new report on Digital Assets makes detailed recommendations including.
First, digital assets should be recognized as a distinct “third” category of thing to which property rights can relate: alongside tangible things “in possession “(eg. cars) and intangible things in action (eg. debt). This should be confirmed in legislation.
Second, the Government should create a panel of industry-specific technical experts, legal practitioners and judges to provide non-binding advice to UK Courts on complex legal issues relating to digital assets.
Third, a bespoke legal framework should be created that better facilitates the entering into, operation and enforcement of collateral arrangements relating to crypto tokens and crypto assets.
Sarah Green, Law Commissioner: "recommendations...seek to solidify the legal foundation for digital assets. We also aim to ensure that the private law in England and Wales remains a dynamic, globally competitive and flexible tool that enables further technological innovation."
Andrew Griffith, Economic Secretary to the Treasury: “I firmly welcome the Law Commission’s Final Report on Digital Assets and the work done to meet the complexities of these technologies well into the future – and will carefully consider their findings and recommendations.”
In the meantime, the Financial Services and Markets Bill will become UK law TODAY (29 June 2023). Both Houses of Parliament have now agreed the text of the Bill. Royal assent is PASSED Today 29 June when the bill becomes an Act of Parliament (law).
The Act provides a statutory foundation for the regulation of stablecoins. The Treasury will have power to make new regulations by way of “secondary legislation”. This will facilitate “agile” regulation that can be updated quickly as international standards develop.
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