On September 11, the UK Parliament’s Law Commission introduced the Property Bill, which legally recognizes digital assets. The proposed legislation categorizes crypto assets, NFTs, and carbon credits as personal property under UK law.
This marks the first time in the UK’s history that digital assets are formally recognized within the framework of property law in England and Wales.
Justice Minister Heidi Alexander stated, “Our world-leading legal services are a vital part of our economy, helping to drive economic growth and ensuring that the UK remains at the heart of the international legal industry.”
The UK’s personal property law covers all non-land property rights, dividing them into tangible possessions (like cars) and intangible rights (such as debts).
Alexander added, “It’s essential that the law keeps pace with evolving technologies. This new bill aims to provide a clear legal basis for handling complex property cases involving digital assets.”
The bill also seeks to protect both individuals and businesses from fraud and scams and offers legal clarity to judges dealing with disputes over digital property.
Strengthened legal protections are expected to attract new crypto companies to the UK. It is estimated that this will contribute an additional £34 billion to the local legal services sector.
The announcement also highlighted that the UK governs approximately £250 billion in global mergers and acquisitions cases and 40% of corporate arbitration matters. Keeping the law up-to-date is critical to maintaining the UK’s position in these areas.
A New Legal Category for Digital Assets
The Law Commission’s summary acknowledges that digital assets do not fit neatly into the existing categories of tangible or intangible property.
The report emphasizes the introduction of a new legal category for crypto assets and other digital items, described as “things associated with personal property rights.” This classification allows digital assets to be legally owned or transferred, much like physical property.
The commission deliberately avoided setting strict boundaries for this new category. By not imposing rigid definitions, the law can remain adaptable, covering a wider range of digital assets as technology advances.
The report noted, “These assets are not limited to digital items and may include things like milk quotas or certain carbon emission credits. We refer to these digitally-associated assets as ‘digital objects.’”
Additionally, the Law Commission recommended the creation of a multidisciplinary project to establish and implement a legal framework that facilitates the interaction, operation, and enforcement of crypto asset-related matters.
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