Established by the LawtechUK panel, the UK Jurisdiction Taskforce (UKJT) has issued a statement on digital asset clarity, which will “cement” the UK as the digital financial market leader in digital securities. The research was completed in partnership with the finance and economics consultancy Oxera.
UKJT is on a mission to promote the use of English law and UK jurisdiction for technology and digital innovation. UKJT aims to clarify key questions regarding the legal status of, and basic legal principles applicable to, crypto-assets (digital assets), distributed ledger technology, smart contracts, and associated technologies under English law.
UKJUT has issued research and a legal statement on digital securities.
A new legal statement and research have been published by a UK government-backed initiative to provide legal clarity for market participants in digital securities.
According to the group, digital securities, or the issue and transfer of equity or debt securities on blockchain or DLT, have grown in importance as digital transformation becomes the top priority for many institutions operating in the financial markets. The group states that there are clear commercial benefits for conducting digital security transactions under English law.
The group notes that English law precludes the need for statutory intervention to support new asset classes or financial structures and that it “provides certainty and confidence to market participants seeking a reliable and adaptable legal framework, suitable for the agile commercial environment. ”
Sir Geoffrey Vos, the Master of the Rolls and Head of Civil Justice in England and Wales, who chairs the UKJT, issued the following statement:
“English law is respected internationally for its ability to evolve and adapt to new technology and new commercial situations. The legal statement will hopefully provide market confidence as to the use of English law in the digital space and as to the complex issues related to digital securities.”
Alexandra Lennox, Director of LawtechUK, noted that English law is a critical piece of infrastructure:
“As market activity becomes increasingly digital, it is important that English law continues to provide market participants with the certainty they need to grow and innovate. The UK Jurisdiction Taskforce of LawtechUK’s legal statement provides much needed clarity that the inherent flexibility of English law can support the operation of digital securities, today. The economic opportunity stemming from English law becoming a global standard in digital markets cannot be understated.”
While digital securities remain a very small segment of the marketplace most observers expect this to change and it is vital ot have legal clarity for this sector of finance to thrive both domestically and globally. As the UK prides itself as a top Fintech hub, pushing forward with a defined approach to handling digital securities.
Reinder van Dijk of Oxera, said markets could quickly tip, and the law is a critical segment of business infrastructure.
The UKJT legal statement is available below.