The Law Commission has undertaken to review the law of England and Wales and consider reforms to ensure that the law can accommodate digital assets. As a first step, it has issued a Call for Evidence. Given the considerable legal uncertainty surrounding digital assets, the FMLC welcomes the Law Commission’s Digital Assets Project and the prospect of law reform.
The FMLC’s response explains that attempting to reform the law in a way that addresses “digital assets” in the “very broad sense” identified in paragraph 1.20 of the Call for Evidence is likely to prove impracticable and to give rise to more uncertainty. The need for law reform is most acute in respect of the narrower category of digital assets, defined in the FMLC’s response, since both the technologies underpinning these and the means by which they are being used in practice are novel and are not assimilated readily with other assets familiar to law and practice.
On the overriding question of whether the law needs to recognise digital assets as capable of being in possession, the Committee’s view is that it does. This should be done in a manner which is sensitive to those features of digital assets which are distinct. For this reason, the FMLC has proposed the recognition of a Third Category of property recognising digital assets as both intangible and yet capable of possession.
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