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The United Kingdom’s Judiciary Commission is pushing for the creation of a “separate” category of personal property to house and protect the unique characteristics of cryptocurrencies and digital assets.
The Authority has made this recommendation, along with three other key points, as mandated by the British government to conduct a common law analysis revealing how the legal framework in England and Wales can take into account cryptocurrencies, non-fungible tokens (NFTs) and other digital assets.
Chief among the recommendations is the creation of a new separate category of personal property for digital assets. The Commission intentionally omitted clear cut boundaries for the proposed category, emphasizing its belief that UK common law should be used to determine which digital assets would fall into this basket.
The announcement, shared with Cointelegraph, highlights the Commission’s view that the new category of personal property will allow for a “subtle approach” to the recognition of digital assets ranging from cryptocurrencies to digitized instruments, including carbon credits or export quotas.
The Legal Commission also proposed the establishment of an industry panel of technical experts, legal practitioners, academics and judges to provide “non-binding advice” to the courts on various legal issues and considerations affecting the sector.
Related: UK Cryptocurrency Bill Reaches Final Stage and On Path To Pass
The creation of a “tailor-made legal framework” is also part of the recommendation to make things easier and enforce collateral agreements.
The latest recommendation calls for reform of statutory law to clarify whether specific digital assets will be subject to the UK Financial Collateral Regulations 2003.
The Legal Commission began reviewing international legal issues related to the cryptocurrency sector in October 2022 at the request of the Ministry of Justice.
The UK Treasury and Home Office have since announced plans to “tightly” regulate the cryptocurrency sector to curb the criminal use of cryptocurrencies in March 2023.