UK Law Commission Introduces Bill to Recognize Digital Holdings as Legal Property

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 United Kingdom (UK) Parliament’s Law Commission introduced the Property (Digital Assets, etc.) Bill on Monday to legally define digital property holdings.

The proposed legislation will deem crypto, non-fungible tokens (NFTs), and carbon credits as personal property under British law. This marks the first time in British history that these 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.

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 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.

Gino Matos, LLM, is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).

Assad Jafri, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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