The UK provides legal certainty for crypto assets and smart contracts

Although new crypto technologies are witnessing significant growth and offer plenty of opportunities, there is still much room for critical questions as to their legal status and characterization.

The UK takes a significant step to reduce the barriers to the adoption of crypto assets and smart contracts by determining their legal status. The legal Statement published by the United Kingdom Jurisdiction Taskforce tackles the legal uncertainties concerning the cryptocurrencies, smart contracts and DLT (distributed ledger technology).

The document provides regulatory clarity by recognizing crypto assets as tradeable property and smart contracts as enforceable agreements under the English and Welsh private law.

The provisions of the paper undoubtedly will benefit consumers and investors by increasing the confidence of their rights. The top 100 crypto assets already account for a collective quarter of a trillion dollars. Attempt to address legal uncertainties will be helpful for protecting the rights of the cryptocurrency traders.

The smart contracts technology ensures a more secure and efficient performance of a contract and allows to execute the transaction without an intermediary. The revolutionary concept wins the market – it is envisaged that the smart contract market could reach $300 million by 2023. Moreover, the World Economic Forum forecasts that one-tenth of the global GDP will be stored on a blockchain by 2027.

The step towards regulatory clarity of crypto assets and smart contracts shows the adaptability of the common law system to fast-changing technology. The statement published by the United Kingdom Jurisdiction Taskforce will encourage the mainstream adoption of crypto assets and smart contracts in the country and bring the advantage to blockchain startups in the UK.

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