UK Recognizes Bitcoin and NFTs as Personal Property – A Big Win for Crypto Owners

In a significant move, the UK government has introduced a crypto bill in Parliament that could change how digital assets are treated under British law. If passed, the bill will classify cryptocurrencies, NFTs, and tokenized real-world assets (RWAs) as personal property, providing legal protection against fraud, theft, and other risks. This legislation is the first of its kind, setting the UK apart globally.

Here’s how the government plans to redefine legal rights for digital asset owners.

Introducing a New Category for Digital Assets

Until now, UK law only has two categories that cover all properties. The first category is “Things in Possession” which includes physical property like house, car and money. The second category covers debts and shares which is called “Things in Action”. The digital assets do not fit in any of these two. To overcome this challenge, the bill introduces a third category that will give these assets a status of personal property.

This move follows a 2023 report by the Law Commission, which noted that digital assets don’t align with existing property categories and should be treated differently. The Commission suggested that formally recognizing digital assets as property would provide clarity in legal cases like business disputes and divorce settlements.

Legal Protections for Digital Asset Owners

A key aspect of the bill is the legal protection it provides for owners of digital assets, including cryptocurrencies, NFTs, and tokenized RWAs. By clearly defining these assets as personal property, the bill aims to remove current uncertainties that often complicate legal matters, particularly in cases of fraud or disputes. This clarity will help courts resolve conflicts involving digital assets more effectively.

Justice Minister Heidi Alexander highlighted the importance of keeping UK laws up to date with technological changes. She stated that this legislation would help the UK remain a leader in the global crypto space, reinforcing its legal sector, which contributes around £34 billion annually to the UK economy.

Maintaining competitiveness in this fast-evolving field is vital for ensuring the UK’s continued influence.

Paving the Way for a Crypto-Friendly UK

If passed, the bill is expected to establish the UK as a crypto-friendly nation, drawing investment and business to its legal industry. By being the first country to officially recognize digital assets as personal property, the UK aims to distinguish itself from other nations, creating a safer and more predictable environment for crypto investors and companies.

With clear legal guidelines in place, the UK hopes to support a strong and secure digital asset market, enhancing its role as a key player in the global crypto industry.

Also Read: Crypto Regulations in the United Kingdom 2024

What are your concerns or questions about this new law? Let’s discuss!