Head of Blockchain and Digital Assets, Matt Green, recently submitted evidence to the House of Lords Special Public Bill Committee on the Property (Digital Assets etc) Bill. 

Matt argued that the Bill is both necessary and effective. He suggests that legislation, as opposed to common law, would provide the judiciary and policy makers with the confidence to apply property right principles to a new asset class – which is vital for consumers and financial institutions who are increasingly reliant on digital assets. Matt further argues that the Bill prescribes a negative definition which allows for things not yet created or not easily defined as capable of inclusion – providing additional flexibility to policymakers.

He notes that the Bill is a response to nervousness in the judiciary in deviating with established definitions of property, and that the wording is the door ajar to give decision makers the freedom to create new asset classes where required, without falling foul of common law principles.   

Discussing the Bill’s potential for negative or unexpected consequences, Matt warns that the wide wording of the Bill may open the floodgates and policy must therefore be carefully considered and robustly drafted. He also notes that monitoring the benefits and drawbacks of the Bill must be considered on an ad hoc basis by policy makers, to prevent any unexpected consequences.

In all, he senses that although there are more pressing matters at law, including (i) liability of decentralised entities, and liability of coders/ software developers (ii) regulation of digital assets, and the rules of engagement and (iii) the effectiveness of the Economic Crime and Corporate Transparency Act (2023), the Bill, of a version of it, must be passed to give confidence to the market and to show this jurisdiction is taking digital assets seriously.

In relation to improving the Bill, Matt argues as to why the chosen thing should be an object of personal property rights – suggesting it may be considered as heavy handed. He also notes that it may be useful to include some non-determinative wording as part of this legislation to help guide decision makers when considering property rights.

Click here to read Matt’s evidence in full.