The Law Commission of England and Wales has proposed that the country should have a new category of private property law that applies to digital assets.
This law would apply to cryptocurrencies which are used to make payments, or represent assets, the regulator explained.
The proposal comes at a time when lawmakers in the European Union (EU) have described the cryptocurrency space as a “Wild West” and have stressed the importance of regulating it effectively.
The Commission suggested that non-fungible tokens (NFTs) are not easy to define in current private property law, and therefore changes may be necessary.
Law Commissioner for commercial and common law Sarah Green said: “Our proposals aim to create a strong legal framework that offers greater consistency and protection for users and promotes an environment that is able to encourage further technological innovation.”
To deal with this problem, the Commission suggests that the definition of “data objects” can be used to ensure that it’s easier to regulate the elusive digital goods.
The new category will also come with its own criteria of definition, such as being composed of electronic data.
Allen & Overy commercial litigation lawyer Jason Rix told Reuters, property rights matter as they can be asserted against anyone – not just the other person in a contract.
While a complicated issue on the face of it, the desire to regulate every aspect of the digital industry is encouraging.
It seeks to empower consumers and give regulators more teeth in dealing with contentious issues.
Both the UK and the EU, among other global regulators, are now pushing more actively for establishing a clear-cut regulatory framework on crypto.
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