UK introduces bill to officially recognise cryptocurrencies
Date: 2024-09-12 Author: Oliver Abernathy Categories: IN WORLD
The UK Parliament introduced the Property (Digital Assets etc) Bill on 11 September. The aim of the bill is to clarify the legal status of digital assets such as cryptocurrencies, non-fungible tokens (NFTs) and other tokenised assets.
The bill will be the first time in UK history that digital assets will be officially recognised as personal property under the laws of England and Wales.
The bill is expected to provide enhanced legal protections for digital asset owners and strengthen the UK’s position as a competitive player in the global digital asset market.
UK Cryptocurrency Bill: Recognising crypto assets as personal property
The Property (Digital Assets etc) Bill proposes to introduce a new category of personal property specifically for digital assets, alongside the existing categories of ‘things in possession’ (such as gold, money and cars) and ‘things in claim’ (such as debts and shares).
This new category would allow certain digital assets, including cryptocurrencies and NFTs, to be treated as personal property under UK law.
The change removes the legal uncertainty surrounding digital assets, which has previously left many owners in a legal vacuum when their assets are subject to interference or manipulation.
Justice Secretary Heidi Alexander stressed the importance of updating legislation to reflect evolving technology.
She said: “It is important that legislation keeps pace with evolving technology and this Bill will ensure the sector maintains its leading position in crypto assets and clarify complex property issues.”
The bill aims to help judges and lawyers resolve disputes involving digital assets, such as property claims in divorces, fraud cases and disputes over the ownership of assets.
By strengthening the legal framework, the bill provides essential protection for digital asset owners, providing confidence in the fight against fraud and scams.
Full legal protection for crypto asset owners: the largest cryptocurrency bill in UK history?
With digital assets formally recognised as personal property, the UK aims to maintain its position in the global tech industry.
This is expected to attract more business and investment to the UK legal services sector, which already contributes £34 billion to the country’s economy each year.
Justice Secretary Alexander noted that English law governs a significant proportion of global legal matters, including mergers and acquisitions worth £250 billion and 40% of corporate arbitrations worldwide.
Updating the legal system is seen as essential to ensure the UK remains the jurisdiction of choice for international legal services.
The introduction of this Bill follows the recommendations of the Law Commission, which carried out a comprehensive review of digital assets at the request of the Ministry of Justice.
In its 2023 report, the Law Commission identified barriers to digital assets being recognised as property under the laws of England and Wales and proposed legislative solutions.
The report concluded that while some digital assets do not fit neatly into existing property categories, they should still attract personal property rights.
The Bill is particularly important given the recent challenges to the regulation of cryptocurrencies in the UK.
The Financial Conduct Authority (FCA) recently reported an 87% failure rate among crypto companies applying for licences under anti-money laundering rules in the last financial year.
Of the 35 applications, only four were approved, highlighting issues such as long waiting times and a lack of clarity from the FCA.
Once passed, the bill will provide a more transparent legal framework for the management of digital assets, giving greater certainty to both owners and businesses.
Once passed, the bill will provide a more transparent legal framework for the management of digital assets, giving greater certainty to both owners and businesses.
