The UK government has introduced a bill to Parliament that would, for the first time in the country’s history, recognise cryptocurrency as personal property under new law.
The Property Bill will treat digital assets, also including digital holdings, NFTs and carbon credits, as personal property for further legal protection of holders and investors in the UK market.
This would grant the same legal rights for crypto and other digital assets as traditional financial instruments, enabling greater clarity to outside investors over the definitive legal rights that comes with holding such properties.
This added layer of security will help investors and owners protect themselves against potential fraud and scams while also providing legal officers with more clarity on such financial security risks if cases are placed in courts.
Previously, digital assets were not definitively included in the scope of English and Welsh property law, leaving owners in a legal grey area if their assets were interfered with.
Justice Minister, Heidi Alexander, said: “Our world-leading legal services form a vital part of our economy, helping to drive forward growth and keep Britain at the heart of the international legal industry.
“It is essential that the law keeps pace with evolving technologies and this legislation will mean that the sector can maintain its position as a global leader in crypto assets and bring clarity to complex property cases.”
As previously mentioned, digital assets existed in a somewhat grey area as it had no classification of where it lied in a property sense.
Within the new Property Bill, digital assets will now open up a new third classification arm. This new arm will complement the ‘things in possession’ – gold, money, etc. – and ‘things in action’ – debts, shares, etc. – classifications.
When it comes to defining digital assets, this has always been a difficult task for not just UK policymakers but those across the world. The government acknowledged that digital assets are an “extremely broad term”, encompassing many aspects such as cryptocurrencies, NFTs, and more.
The Law Commission’s recommendations only apply to a subset of digital assets, of which the main one is crypto tokens.
The newly proposed bill is also a stepping stone in the UK’s roadmap to become a leader in digital finance. The government outlined in its statement that the country governs £250bn in global mergers and acquisitions, as well as 40% of global corporate arbitrations.
With the new bill, yet to be officially passed, the UK will look to encourage private digital asset companies to enter the UK market as it has now provided more clarity over ownership, something that has been a major battle in the US between the Securities and Exchange Commission and relevant crypto companies.
