The UK Jurisdiction Taskforce (UKJT), an industry-led group of LawtechUK, tasked with positioning English law as a law of choice for new technologies, has launched a public consultation on the issuance and transfer of digital securities under English private law. The consultation aims to provide clarity to the market as to the types of digital security models which English law will support.
The use of blockchain, distributed ledger technology (DLT) and associated technologies offers significant potential in transforming businesses operating in the digital and financial markets. A number of jurisdictions, including Luxembourg and France, have introduced tailored legislative frameworks to facilitate the commercial use of blockchain and DLT under their respective legal systems. However, no similar statutory regime has been introduced in the UK and there is some perception in the market that English law may be comparatively less supportive of digital securities.
The consultation aims to address these concerns and promote the choice of English law for digital securities arrangements. Despite the lack of a statutory regime or case law specifically considering digital securities, English common law provides a high degree of flexibility and is already capable of accommodating many digital security structures.
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Through the Legal Statement on Digital Securities, UKJT seeks to understand whether English private law supports the issuance and transfer of equity or debt securities using a system deploying blockchain or DLT. To this extent, the consultation seeks to obtain experts’ and public members’ input in relation to the following question:
Are there any material issues of concern to stakeholders in relation to the issuance and transfer of digital securities under English private law?
Sir Geoffrey Vos, Chancellor of the High Court and Chair of the UKJT comments: “The use of blockchain offers obvious advantages that will inevitably be taken up over time and the curve plotting the growth of DLT usage closely tracks the growth of the internet. These are borderless technology and it is likely that one or two systems of private law will come to dominate and underpin the use of DLT and digital assets recorded on-chain. If English law can be positioned as a good candidate to provide the legal foundation for the use of DLT and cryptoassets internationally, it would be even more significant for the UK economy.
“This consultation is an important opportunity to assist us identify the wide ranging and critical viewpoints on the questions that the proposed Legal Statement on Digital Securities can most usefully answer. We recognise many experts and interested members of the public in the legal, digital and financial sectors have views on this. This consultation allows them to have their say on this important subject and I urge as many people as possible to use this opportunity to share their views with the UKJT.”
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