The Property (Digital Assets etc) Bill has been introduced to the UK parliament. It aims to make sure that digital holdings including cryptocurrency, non-fungible tokens such as digital art, and carbon credits can be considered as personal property under the law.
It will mean that the UK is 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. There are currently two categories of property – “things in possession” (money, cars etc.) and “things in action” (debts, shares etc.). The Bill introduces a third category of “thing” to allow for certain digital assets to attract personal property rights.
As a result, the new law will provide 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. The new bill means the UK legal sector will be better equipped to respond to new technologies.
The action being taken on digital assets is in response to the Law Commission’s report in 2023. Digital asset is an extremely broad term, and encompasses 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 crypto tokens. The Law Commission’s report summary can be found here.
