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According to Thursday’s consultation paper, the U.K. Law Commission, an independent statutory agency that evaluates and updates the law, seeks to expand the nation’s property rules to include cryptocurrencies and non-fungible tokens (NFTs). In addition to formally designating digital assets as personal property, the proposed changes may make it simpler for crypto investors to pursue legal claims for losses sustained due to thefts or frauds.
U.K. Financial Regulators Proposed Stablecoin Bill
Last week, asset-backed cryptocurrencies known as stablecoins were also proposed as legal payment methods by U.K. financial regulators to Parliament. The government is planning a consultation on cryptocurrencies as investment assets by the end of the year, and more stablecoin restrictions are on the way. The commission avoids cryptocurrencies that serve only as payment methods in the consultation document, which solicits opinions from legal and technological experts. Instead, it concentrates on digital assets that can be traded, utilized as stores of value, or represented by other assets. The document also makes the case that because digital assets differ from traditional physical assets in “many diverse elements” and “unique traits,” the U.K.’s current property rules cannot adequately account for them. The document states that at the moment, U.K. property law distinguishes between two categories of personal property: “things in action,” which refers to assets like company shares that can “only be claimed or enforced through legal action,” and “things in the possession,” which includes tangible items like a “bag of gold.” The Law Commission is recommending the development of a new category called “data objects” to account for things made of data in an electronic form, including databases, software, digital records, domain names, and cryptocurrency to accommodate digital assets.