One of the problems that most governments around the world have with cryptocurrencies and related assets is that they are in a bit of a legal gray area. This makes it difficult to classify them under the law, which is important as they need to be regulated properly for legal purposes.
The UK jurisdiction taskforce (UKJT) of the LawTech Delivery Panel has cleared things up by classifying crypto assets as property which have sufficient legal certainty.
This pronouncement was made in a 46 page statement so that people would make no mistake on what the task force was talking about and its reasoning for it.
The UKJT has also decided on how enforceable smart contracts are and whether they are legally binding. According to them, they are legal under UK law since the blockchain mechanisms behind smart contracts can meet the legal requirements of contracts while private key encryption can stand in as a signature.
The UKJT is comprised of members from across the spectrum of government and the financial industry had some of the best minds in the business working on these decisions. The main support for this decision was in a recent case in Singapore. In that case, the judge accepted the idea that bitcoins could be the subject of a trust. This means that they could be treated as property.
Cryptoassets can be considered as digital property. This meant that with a little legal tweaking, the UK could get a clear legal picture of how crypto assets should be treated. With this decision, it finalizes how crypto assets will be treated in the UK. This can solve many uncertainties when it comes to taxes and other laws and is a major step forward for the UK’s treatment of crypto assets.
Looking to the Future
As one of the six task forces created by the UK government to clear up the legal difficulties of using technology, the UKJT has been doing a good job. It has already answered several critical questions that will affect how crypto assets and smart contracts will be used in the real world.
Some of the other taskforces are hoping to resolve different legal issues that make it hard for the financial industry to adopt the latest in financial technology. With this clarification from the UKJT, Brits can expect a more measured approach by the authorities when it comes to handling crypto assets and smart contracts.
