UK TaskForce (UKJT) Addresses The Legal Status Of Cryptocurrencies And Smart Contracts
Cryptocurrency adoption has seen great progress in 2019 where several countries have come out to regulate crypto under new laws or categorized them under the existing ones. The latest country to address the status of digital assets is the UK where the Jurisdiction Taskforce of the Lawtech Delivery Panel made available an announcement concerning their position of cryptocurrency, DLT, and smart contracts.
The Lawtech Delivery Panel is a group of industry experts from the government and the judiciary, who are tasked at helping the UK's legal sector.
Tech Nation, UK's entrepreneur network announced the release of the paper addressing the legal status of cryptocurrencies. The paper recognized these digital assets as tradeable property while it categorized smart contracts as enforceable agreements under local law.
Earlier this year, Russia also proposed quite similar regulation for crypto assets where it defined these digital currencies as finding a new treasure and proposed to tax it in a similar way. France and Germany exempted crypto-to-crypto transactions from any form of tax, while customers are required to pay for the conversion to Fiat.
Jenifer Swallow, the director of the Lawtech Delivery Panel acknowledged the growing popularity of the DLT technology and cryptocurrencies. She noted that the worldwide market for smart contracts is anticipated at around three hundred million in the next 4-5 years. Apart from that, the World Economic Forum foresees that by 2027, 1/10th of the world GDP will be retained on blockchain.
Swallow noted that because of such rapid adoption level of the emerging technology and Fintech sector, it is important to regulate them positively to gear up for the future. She said,
“It is great to see the adaptability of our common law system to fast-changing technology, demonstrated in this landmark legal statement from the UKJT. Tech Nation is excited to work with the Lawtech Delivery Panel on leading initiatives such as this, to support business growth, clarity in law and the evolution of new tech.”
Geoffrey Vos, Chancellor to the High Court and chair of the U.K. Jurisdiction Task Force agreed with what Swallow said and sees an equal amount of potential in DLT and cryptocurrencies himself. He explained,
“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 in areas that are of great importance to the technological and legal communities and to the global financial services industry.”
Regulatory uncertainty one of the key reasons behind restricted adoption of crypto and DLT
Tech Nation believed that one of the key hindrances in the widespread adoption of Blockchain and cryptocurrencies are the legal uncertainties.
They noted that their recent report on the status of cryptocurrencies would act as a base for guiding cryptocurrency adoption in the United Kingdom, which would, in turn, benefit the budding crypto and blockchain ecosystem in the country.