The Law Commission of the United Kingdom (UK) Parliament introduced the Property (Digital Assets, etc.) Bill on Sept. 11 to recognize digital holdings legally.
The proposed legislation deems crypto, non-fungible tokens (NFTs), and carbon credits personal property under British law. This marks the first time in British history that assets will be definitively included in the scope of English and Welsh property law.
Justice Minister Heidi Alexander stated:
“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.”
English personal property law addresses all non-land-based property interests, dividing them into things in possession, such as a car, and things in action, like debt.
Clarity and protection
Alexander said that keeping the law in pace with evolving technologies is essential, and the new bill aims to provide much-needed clarity regarding complex property cases.
The bill is designed to protect owners and companies against fraud and scams and assist judges in complex cases involving disputed digital holdings or settlements.
The enhanced protections are expected to potentially attract new crypto companies to the UK, which would result in a £34 billion growth in the local legal services industry.
Notably, the statement also highlighted that English law governs an estimated £250 billion of global mergers and acquisitions, and 40% of global corporate arbitrations, making it crucial to keep the law current to maintain the UK’s position.
No hard boundaries
The Law Commission’s report summary recognized that, under the personal property law, digital assets are neither things in possession nor things in action.
The report highlighted that the Law Commission of the UK has introduced a new legal category for crypto assets and other digital objects. This new category is described as “things to which personal property rights can relate,” meaning that these assets can be legally owned or transferred, similar to physical property.
The report also noted that the Law Commission intentionally avoided defining strict boundaries for this new category. By not imposing rigid limitations, the law can remain flexible and adaptable, encompassing a broader range of digital assets as the technology evolves.
The document states:
“These might not necessarily always be digital things and could include things like milk quotas or certain carbon emissions allowances. We call digital things falling within the third
category “digital objects”.”
The Law Commission also recommended the creation of a multidisciplinary project to formulate and execute a legal framework that facilitates interaction, operation, and enforcement related to crypto arrangements.
Source: https://cryptoslate.com/uk-parliament-proposes-legislation-to-recognize-digital-assets-as-personal-property/