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UK charges ahead with legal certainty for smart contracts and cryptoassets

UK charges ahead with legal certainty for smart contracts and cryptoassets

In a landmark statement, the UK Jurisdiction Taskforce of the Lawtech Delivery Panel today set out the recognition of cryptoassets as tradable property, and smart contracts as enforceable agreements under English Law.

The statement is being hailed as a significant step in recognising the legality of smart contracts and the trading of cryptoassets in the UK, with legal certainty no longer proving a barrier to adoption.

By providing investors with increased confidence of their rights, the statement helps to provide a dependable foundation for mainstream utilisation of cryptoassets and smart contracts, says chancellor to the High Court, the Rt Hon Sir Geoffrey Vos, chair of the UKJT.

‘‘In legal terms, cryptoassets and smart contracts undoubtedly represent the future," he says. "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.’’

By setting out that smart contracts exist as agreements that can be identified, interpreted and enforced using ordinary and well-established legal principles, the industry now has the certainty needed to push ahead with innovations to revolutionise the legal agreement lifecycle and arbitration processes, he adds.

Jenifer Swallow, director, Lawtech Delivery Panel, comments: "The worldwide smart contract market is expected to reach $300m by 2023 and the World Economic Forum predicts 10% of global GDP will be stored on the blockchain by 2027. 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.”

The legal statement was drafted by Lawrence Akka QC, David Quest QC, Matthew Lavy and Sam Goodman and supported by members of the UKJT, Linklaters LLP and the respondents to a public consultation which included businesses, academics and the wider legal sector.

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 November, 2019, 11:29Be the first to give this comment the thumbs up 0 likes

Hopefully, Smart Contracts won't require Stamp Duty to be enforceable under English Law, unlike Malta Law!

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Russell Bell
Russell Bell - Fastbase Ltd - Wellington 20 November, 2019, 23:25Be the first to give this comment the thumbs up 0 likes

As far as I can make out this statement doesn't differentiate between fungible cryptoassets (e.g. crypto-currency) vs a specialised or unique asset (e.g. such as may be represented by a smart contract).  The former is a form of money, the latter an intangible fixed-asset.  An important distinction to accountants that's been slow to receive recognition.