Tech-savvy owners of Bitcoin and other digital assets will benefit from greater legal protection thanks to an important clarification to the law.
- Bitcoin and other digital assets can be considered personal property under new draft law introduced in Parliament today (11 September 2024)
- Owners to benefit from increased legal protection
- Changes will keep English and Welsh law at the forefront of the global tech industry
The Property (Digital Assets etc) Bill, introduced in Parliament today, will mean that for the first time in British history, digital holdings including cryptocurrency, non-fungible tokens such as digital art, and carbon credits can be considered as personal property under the law.
The Bill will also ensure Britain maintains its pole position in the emerging global crypto race by being one of the first countries to recognise these assets in law.
Previously, digital belongings 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.
The new law will therefore also give legal protection to owners and companies against fraud and scams, while helping judges deal with complex cases where digital holdings are disputed or form part of settlements, for example in divorce cases.
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 cryptoassets and bring clarity to complex property cases.
Today’s news also means the UK legal sector will be better equipped to respond to new technologies, attracting more business and investment to the legal services industry which is already worth £34 billion a year to the economy.
It is estimated that English law governs £250 billion of global mergers and acquisitions, and 40 per cent of global corporate arbitrations, so keeping the law up to date is vital to ensuring that the UK remains the law of choice internationally.
Background
- Digital asset is an extremely broad term, encompassing a variety of things such as digital files, digital records, email accounts, digital carbon credits, cryptoassets and non-fungible tokens (NFTs). The Law Commission’s recommendations only apply to a subset of digital assets, of which the main one is cryptotokens.
- Currently there are two categories of property, “things in possession” (e.g. gold, money, cars) and “things in action” (e.g. debts, shares). This Bill introduces a third category of “thing” to allow for certain digital assets to attract personal property rights.
- The action being taken on digital assets is in response to the Law Commission’s report in 2023. The MOJ commissioned the report to identify any barriers to the recognition of digital assets as property under English and Welsh private law and to recommend solutions.
- The Law Commission’s report summary can be found here.
