Legal experts in the UK have launched a public consultation to explore the necessary legislative changes for the issuance and transfer of digital securities using blockchain and distributed ledger technology (DLT).
This initiative, led by the Government-backed UK Jurisdiction Taskforce (UKJT), seeks to clarify which digital security models can operate under English law. While several jurisdictions, including Luxembourg and France, have established tailored legislative frameworks to support the commercial use of blockchain and DLT, the UK lacks a similar statutory regime. Consequently, there is a perception that English law may be less favorable to digital securities.
The consultation invites feedback from stakeholders regarding any significant issues related 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, emphasized the importance of this consultation, encouraging experts and the public in the legal, digital, and financial sectors to share their opinions.
The consultation began on July 29, 2022, and will conclude on September 23, 2022. In a related effort, The Law Commission of England and Wales has released a consultation paper outlining preliminary law reform proposals aimed at recognizing and protecting digital assets, including crypto-tokens and cryptoassets. This move responds to requests from the UK Government to ensure that legislation keeps pace with technological advancements.
The consultation paper analyzes how existing personal property law applies to digital assets, considering their unique characteristics that make them distinct from traditional physical assets. Professor Sarah Green, the law commissioner for commercial and common law, stated the importance of adapting laws to accommodate the rapid evolution of digital assets like NFTs and crypto-tokens. The proposals aim to create a comprehensive legal framework that offers consistency and protection for users while fostering an environment conducive to further technological innovation. The consultation will close on November 4.