Parliament is taking action against the legislation surrounding cryptocurrency by introducing the Property (Digital Assets etc) Bill, which gives clarity to the status that assets such as Bitcoin, NFTs and carbon credits.
This legislation proposes that the UK should start recognising these digital entities as personal property, as a way to extend the legal protections that digital asset holders do not have currently.
How Does This Impact Digital Asset Holders?
With this Bill in place, digital asset owners can benefit, not just from the legal protection aspect, but also in a sense that resolutions and guidance are given to those with digital assets. The clear classification of digital assets as personal property under the law helps take away the ambiguities such as in divorce settlements, that asset owners went through in legal disputes.
Justice Minister Heidi Alexander commented, “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.”
The bill innovates by introducing a third category of personal property specifically for digital assets, augmenting the traditional “things in possession” and “things in action” categories.
What Was The Case Before The Bill?
Prior to this bill, there was a legal grey area concerning the status of digital assets, as they were not explicitly recognised under existing categories of English and Welsh property law.
This ambiguity often left digital asset owners without clear legal recourse in cases of fraud or disputes. The new legislation addresses these challenges by defining digital assets within the property law framework, which in turn protects their interests.
How Does This Support The UK Law Industry?
When it comes to supporting the legal sector in the UK, this bill helps by keeping the legal framework up to date and with the times, therby making the UK a standout when it comes to innovation within the law. It is anticipated that this Bill will attract more business and investment to the legal services industry, which already is a large industry, valued at £34 billion annually.
In updating these legal standards, the UK legal system would in turn remain the preferred choice for handling global mergers, acquisitions, and corporate arbitrations involving digital assets.
How Will This Bill Affect International Law?
The introduction of this bill is said to impact international law as a whole. English law currently governs a large amount of global merger and acquisitions.
The government announced, “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.”
With digital assets becoming more prevalent in international commerce, it isn’t far fetched that this legislative plan will most likely influence other jurisdictions to follow suit, so that digital assets are recognised and protected globally.
