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The United Kingdom jurisdiction taskforce confirmed in a statement by Sir Geoffrey Vos that crypto-assets will be recognized as tradeable property while smart contracts are enforceable under English law.
In recent months, digital assets and cryptos have attracted heated debates. Some governments and watchdogs are making laws that may allow them to go mainstream while others are still hesitant. In what appears as a major development in the nascent crypto industry in the UK, a landmark legal statement was published.
The statement was given by the Chancellor of the High Court, Sir Geoffrey Vos. It confirmed that crypto-assets will be recognized as tradeable property while smart contracts are enforceable under English law. Lawyers believe that this recognition has the potential to make cryptocurrency use mainstream.
Recently, the UK Jurisdiction Taskforce of the Lawtech Delivery Panel published a legal statement that addresses the legal uncertainty of digital assets and smart contracts. Welcoming the ‘legal statement’ published on November 17, lawyers are convinced that it is the first step to gaining full legal status. Vos expressed his delight at the clarity given to the digital assets saying:
“In legal terms, crypto assets and smart contracts undoubtedly represent the future. I hope that the Legal Statement will go a long way towards providing much-needed market confidence, legal certainty and predictability. It will affect areas that are of great importance to the technological and legal communities, and the global financial services industry.”
The smart contracts come in handy in the creation of more secure and efficient methods of implementing contracts between parties. It is projected that the global smart contract market will reach $300 million by 2023. Moreover, the World Economic Forum predicts that 10% of global GDP will run on the blockchain network by 2027.
Some individuals have alleged that the legal statement could go a long way to help digital asset customers. That, in turn, will also enhance confidence in the investors in the UK industry. Currently, the demand for cryptos is already at its peak, without the hesitancy that laced the 2017 bull market.
Sam Goodman, David Quest QC, Lawrence Akka QC, and Matthew Lavy drafted the legal statement. They got support from Linklaters LLP, members of the UKJT, and various respondents. The respondents came from a public consultation that included academics, businesses, and the wider legal sector.
According to the report, the crypto-assets comprised of all the indicia of property. The statement further stated that the distinctive properties of all other digital assets, in spite of their intangibility, use of a DLT (distributed ledger technology) did not invalidate their allegation of being categorized as property.
This statement will offer a firm foundation for the mainstream adoption of crypto assets and smart contracts in the United Kingdom. That will potentially provide a boost to the companies working in the cryptocurrency industry. According to the task force, there is a huge potential importance of smart contracts. The press release stated:
“Smart contracts can be used to create more secure and more efficient ways of implementing (and automating performance of) contracts between parties. This could revolutionize agreements, from mortgages and medical research to property ownership, as smart contracts automatically execute transactions and remove the need for a middle man.”
The statement was finalized once consultations were made with the ‘tech community’ and the financial sector. Regulators and legal experts were also involved. Going forward, the Law Commission will determine whether any regulation or legislation may be ‘desirable’ in the crypto-assets sector.