Legal experts in the UK have opened a public consultation on the legislative changes required to support the issuance and transfer of digital securities on blockchain and DLT systems.
The consultation, conducted by the Government-backed UK Jurisdiction Taskforce (UKJT), aims to provide clarity to the market as to the types of digital security models which English law will support.
A number of jurisdictions, including Luxembourg and France, have introduced tailored legislative frameworks to facilitate the commercial use of blockchain and DLT under their respective legal systems. However, no similar statutory regime has been introduced in the UK and there is some perception in the market that English law may be comparatively less supportive of digital securities.
The consultation aims to address these concerns and is seeking input on any material issues of concern to stakeholders in relation to the issuance and transfer of digital securities under English private law.
Sir Geoffrey Vos, Chancellor of the High Court and chair of the UKJT comments: “We recognise many experts and interested members of the public in the legal, digital and financial sectors have views on this. This consultation allows them to have their say on this important subject and I urge as many people as possible to use this opportunity to share their views with the UKJT.”
The public consultation opened on 29 July 2022 and will close on 23 September 2022.
Separately, The Law Commission of England and Wales has published a consultation paper which contains provisional law reform proposals to ensure recognition and protection of digital assets, including crypto-tokens and cryptoassets. The consultation follows calls from the UK Government to ensure that legislation can accomodate the technology as it evolves.
The consultation paper examines how existing personal property law does — and should — apply to digital assets: "Because they are not tangible, some digital assets have many different features to traditional physical assets and to other intangible things that can attract property rights. Their unique qualities mean that many digital assets do not fit easily into traditionally recognised private property law categories or definitions."
Professor Sarah Green, the law commissioner for commercial and common law, comments: “Digital assets such as NFTs and other crypto-tokens have evolved and proliferated at great speed, so it’s vital that our laws are adaptable enough to be able to accommodate them. Our proposals aim to create a strong legal framework that offers greater consistency and protection for users and promotes an environment that is able to encourage further technological innovation.”
The consultation closes on 4 November.