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UK law fit for digital securities says taskforce

UK, digital, securities, taskforceA UK government-backed task force has determined that digital securities issued via the blockchain have legal status within the UK legal framework.

The decision of Lawtech UK’s Jurisdiction Taskforce (UKJT) means there is no need for further legislation to accommodate the issuance and trading of digital assets.

The announcement followed an open consultation process that ended on November 30.

The conclusion was hailed as a “major milestone” by UK head of fintech at law firm Linklaters Richard Hay who was also one of the draftspersons of the UKJT statement.

“It brings certainty to the digital securities market and reinforces the role that English law plays in the UK’s continued position as a global leader in financial services,” stated Hay.

The legal status of securities issued via the blockchain is a critical issue in the ongoing regulation of the digital assets market.

A consultation paper issued by the England and Wales Law Commission raised the issue of property rights and intangible 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,” stated the Commission after its consultation, also in November. “Their unique qualities mean that many digital assets do not fit easily into traditionally recognised private property law categories or definitions.”

But while the Commission’s consultation paper argued that UK law must “go further to acknowledge these unique features”, the UKJT announcement appears to say that the current law is already fit-for-purpose regarding digital assets.

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