The LawTech Delivery Panel, set up under a Government and Law Commission initiative, is consulting on the status of cryptoassets, DLT and smart contracts under English private law. The consultation notes:
- the uncertainty over many aspects of the status of cryptoassets and when English law would categorise them as “property”. This matters, as if a cryptoasset is not property, it cannot be owned and therefore cannot, for example, be bought or sold, or have security created over it. If a cryptoasset is property, is it a physical thing, or a legal right. And, if it is property, is it negotiable and how is it transferable?;
- English law should adapt as required to facilitate the use of smart contracts – so it is essential that these contracts should give rise to binding legal obligations in clearly articulated circumstances.
The paper assesses how DLT works, and its key features, then moves on to consider what types of cryptoasset exist and how transactions in them occur, and then describes what is encompassed within the term “smart contract”. The narrative shows all the differences in interpretation and uncertainties, and the consultation asks a number of questions to seek views on how to characterise a number of important matters.
Consultation closes on 21 June.