U.K.: Crypto-assets are legally equivalent to property, clearing the way for businesses to use digital currencies backed by blockchain technology, a high-powered group of legal experts chaired by a senior member of the judiciary reported today.
The panel urged commercial lawyers to prepare for the disruptive impact of digital coins and associated technologies on the law, the legal system, and legal profession before others “steal a march” on them.
UK Jurisdiction Taskforce
Crypto-assets, including but not limited to, digital currencies, can be treated in principle as property; and that smart contracts are capable of satisfying the requirements of contracts in English law and are thus enforceable by the courts.
Led by senior High Court Judge Sir Geoffrey Vos, the goal of the panel was to take significant steps to address uncertainty around digital currencies and related blockchain technology, to build a “dependable foundation for mainstream utilization of crypto-assets and smart contracts.”
The report states that crypto-assets “have all of the indicia [signs] of property.” It explains that in the view of the senior legal figures, the “novel or distinctive features possessed by some crypto-assets — intangibility, cryptographic authentication, use of a distributed transaction ledger, decentralization, rule by consensus — do not disqualify them from being property.”
Further, the panel said that smart contracts and crypto-asset systems have the potential to revolutionize they way agreements such as mortgages, medical research, and property ownership, are carried out:
“[These systems] could revolutionise agreements, from mortgages and medical research to property ownership, as smart contracts automatically execute transactions and remove the need for a middleman.”
Crypto is the Future
Sir Geoffrey, who as chancellor of the High Court is head of its chancery division (which deals with most commercial law disputes), said that “in legal terms, crypto-assets and smart contracts undoubtedly represent the future.” He added that he hoped the legal statement would:
“Go a long way towards providing much-needed market confidence, legal certainty and predictability in areas that are of great importance to the technological and legal communities and to the global financial services industry.”
This support for crypto, blockchain, and related industry is something Sir Geoffrey has been discussing for some time. In a lecture at the University of Liverpool in May, he argued his stance for crypto-assets as property as well as the necessity for proper regulation:
“It is a matter of how they are regulated. As I have already said, a clear distinction needs to be drawn between the concept of crypto-assets as property, on the one hand, and how they are to be regulated, on the other hand.”
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