Katherine Ross

The Law Commission of England and Wales determined that the common law of England and Wales possesses enough flexibility to accommodate cryptocurrencies. However, a few areas require further clarification.



In a paper released Wednesday, June 28, the commission found that “although some digital assets are not easy to place within traditional categories of things to which personal property rights can relate, this does not prevent them from being capable of attracting personal property rights, and that this is clearly the position at common law.”



One of the <a href="https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2023/06/Final-digital-assets-report-FOR-WEBSITE.pdf">suggestions</a> that the commission makes is to develop a third category within personal property rights that could house digital assets such as NFTs.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">NEW: Today we have published our recommendations for reform and development of the law relating to digital assets, like <a href="https://twitter.com/hashtag/NFTs?src=hash&amp;ref_src=twsrc%5Etfw">#NFTs</a> and <a href="https://twitter.com/hashtag/cryptotokens?src=hash&amp;ref_src=twsrc%5Etfw">#cryptotokens</a>. Our reforms aim to provide greater legal clarity and encourage technological innovation. 📕 Read more here: <a href="https://t.co/GEbJkTQWUm">https://t.co/GEbJkTQWUm</a> <a href="https://t.co/VNPsmwkdXR">pic.twitter.com/VNPsmwkdXR</a>&mdash; Law Commission (@Law_Commission) <a href="https://twitter.com/Law_Commission/status/1673941801525452801?ref_src=twsrc%5Etfw">June 28, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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A set of criteria would be necessary and would include assets that are “composed of data represented in an electronic medium, including in the form of computer code, electronic, digital or analogue signals.”&nbsp;



It also includes assets that are rivalrous — meaning that the consumption of the object by a person or persons “necessarily prejudices” the consumption of the object by another person or a group of people.



“The law reform that we do recommend aims to ensure that the legal system, as part of a wider social framework, can reinforce the overall strength of digital asset ecosystems (which also rely on social elements),” the report <a href="https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2023/06/14.294_LC_Digital-assets-summary_v5_WEB.pdf">said</a>.



The findings come after an open period of feedback and previous papers on the legal framework necessary to include digital assets. Following the research, the commission noted that some digital assets are not “entirely analogous with conventional tangible things,” which differentiates them from “tangible things in possession.”



Because of the way laws operate, the commission believes that simply adding new categories that encompass crypto and emerging crypto technology will suffice, preventing the need for a new set of laws specifically focused on crypto, a stance that differs from earlier papers.



Last July, the commission <a href="https://consult.justice.gov.uk/law-commission/digital-assets-consultation/">wrote</a>, “The consultation paper argues the law must therefore go further to acknowledge these unique features, which in turn would provide a strong legal foundation for the digital assets industry and for users.”



The commission, in addition to its findings on the current legal framework, believes that the government should create a panel of experts — composed of industry experts, lawyers, academics and even judges — who can weigh in on the advancement of digital asset technology and give the necessary guidance in the field.



“We conclude that, although some digital assets are not easy to place within traditional categories of things to which personal property rights can relate, this does not prevent them from being capable of attracting personal property rights, and that this is clearly the position at common law,” the paper said.



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england

Wales, English laws ‘sufficiently resilient’ for crypto — with a few tweaks

Casey Wagner

<div id="highlights-block_6261be7bb93fd" class="highlights">
 <ul>
 <li>The BOE is increasing its regualtory budget this year to combat what the bank considers growing risks from emerging technologies</li>
 <li>Banks, insurance companies and related financial entities will have to fork over 9% more than last year</li>
 </ul>
 
</div>



Thanks to crypto, the Bank of England’s regulatory arm says it needs additional funding this year to cover the rising costs of its watchdog responsibilities.&nbsp;



The Prudential Regulation Authority (PRA) plans to raise 321 million pounds ($419 million) by February 2023, a 9% increase from last year, to combat growing risks around cryptocurrencies and other emerging technologies, the <a href="https://www.bankofengland.co.uk/prudential-regulation/publication/2022/april/pra-business-plan-2022-23'" target="_blank" rel="noreferrer noopener">regulator said</a> in its annual business plan Wednesday. 



The agency said operational costs have increased since the United Kingdom&#8217;s exit from the European Union, adding that the regulator hopes to add 100 employees with digital assets know-how.&nbsp;



The budget comes as UK regulators — like their American peers — play catch-up on crypto regulations. The country’s treasury recently made headlines when it asked the Royal Mint, the agency responsible for creating British currency, <a href="https://cms.blockworks.co/uk-treasury-asks-government-coin-issuer-to-mint-nft/" target="_blank" rel="noreferrer noopener">to mint an NFT</a>.



The <a href="https://cms.blockworks.co/uk-aims-to-let-consumers-use-stablecoin-services-with-confidence/" target="_blank" rel="noreferrer noopener">finance ministry</a> earlier this month moved to prioritize regulating stablecoins that are used for payments. The PRA plans to use a slice of its regulatory budget for that purpose.



“Work will also continue in developing a regulatory framework that is ready for technological innovations, such as stablecoins,” the PRA said in a statement.



The funds will be collected from regulated firms, including banks, building societies and insurers. In the 12 months ending in February, the PRA secured 297 million pounds ($386 million) from such entities.



Regulated firms pay different amounts, depending on size and activity. The fee structure is designed so the firms that could potentially cause the greatest harm to the financial system pay more, the PRA said.



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