The UK Parliament has introduced the Property (Digital Assets etc) Bill, which will, for the first time, officially recognize digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and carbon credits as personal property under English and Welsh law.
New Category of Personal Property for Digital Assets
The Bill introduces a new category of property beyond the existing “things in possession” (like money and cars) and “things in action” (like debts and shares). This third category will specifically cover digital assets, allowing them to attract personal property rights. The changes will help courts and legal professionals handle complex disputes involving digital assets, such as those in divorce cases or business agreements.
With the recognition of digital assets as personal property, the new law will offer better protection to owners and companies against fraud and theft. Previously, digital holdings were in a legal grey area, and there was no clear legal recourse if assets were interfered with. The new law aims to address this gap by providing clear legal guidelines and protections for crypto owners.
Maintaining the UK’s Leadership in Crypto Regulation
Justice Minister Heidi Alexander highlighted the importance of keeping the law updated with evolving technologies, stating that the legislation would help maintain the UK’s position as a global leader in the crypto sector. The UK government sees this as a perfect step to strengthen its world-leading legal services industry, which is already a significant contributor to the economy, by attracting more business and investment.
The new law follows recommendations by the Law Commission, which was commissioned by the Ministry of Justice to identify barriers to recognizing digital assets as property. The Commission concluded that while digital assets do not fit into the existing categories of property, they are capable of being recognized under a new category for personal property rights.
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