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The bill introduces a new personal property category of "thing" that will apply to certain digital assets.
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Once enacted, it will help the legal profession determine ownership in disputes such as divorce and provide protection to crypto owners subject to scams and fraud.
The U.K. government introduced a bill to Parliament touching on the legal status of digital assets including cryptocurrencies, non-fungible tokens (NFTs) and tokenized real-world assets (RWAs).
The bill will clarify that these assets are considered personal property under British law. Once enacted, it will give the legal profession guidelines to follow when there's a dispute on ownership, such as during a divorce. It will also provide protection to crypto owners, whether individuals or companies, who are hit by fraud and scams.
Central to the proposal is a new category of property in addition to the existing "things in possession,” which covers items such as money and cars, and “things in action,” such as debt and shares. The new category of “thing” will allow certain digital assets to attract personal property rights, Justice Minister Heidi Alexander said in a statement.
Earlier this year, the Law Commission, which reviews and recommends changes to laws in England and Wales, published a consultation on draft legislation to label crypto as property, followed by a report on its findings . Its conclusions apply to a subset of digital assets, according to the Ministry of Justice, mainly crypto tokens.
"We conclude that some digital assets are neither things in possession nor things in action, but that nonetheless the law of England and Wales treats them as capable of being things to which personal property rights can relate," the Law Commission wrote in the report.