While the rest of the world is tangled in chaos over the legality of cryptocurrencies — some countries even going as far as banning them outright — a distant, foggy island known as the United Kingdom has decided to take a different route. The UK government has put forward a Bill aimed at establishing a new category of personal property that specifically covers cryptocurrencies and NFTs.

Related: Crypto Addiction Is Becoming A Healthcare Danger - Warns British Public Healthcare

This Bill is set to help the UK maintain its leading position in the global crypto race, making it one of the first countries to officially recognize these assets in law.

What Rights will Cryptos and NFTs get?

The Property Bill (covering digital assets, etc.), introduced in Parliament yesterday, marks a historic moment for the UK, as digital assets, including cryptocurrencies, non-fungible tokens (NFTs) like digital art, and carbon credits, can be considered personal property under the law for the first time.

Once passed, it will provide lawyers with clear guidelines to follow in ownership disputes, say, during a divorce. It will also offer protection for cryptocurrency owners, whether individuals or companies, who've been victims of fraud or scams.

Currently, there are two categories of property: "things in possession" (e.g., gold, cash, cars) and "things in action" (e.g., debts, shares). This bill proposes a new category — referred to as "things" — to grant specific digital assets the same rights as personal property.

Digital assets are a broad concept, covering many things like digital files, records, email accounts, carbon credits, crypto assets, and NFTs. The Law Commission’s recommendations apply to a subset of digital assets, with crypto tokens being the main focus.

Justice Minister Heidi Alexander commented:

Our world-leading legal services are a vital part of our economy, driving growth and keeping the UK at the heart of the international legal industry.
The law must keep pace with emerging technologies, and this legislation will ensure that the sector maintains its position as a global leader in crypto assets and brings clarity to complex property cases.

The actions taken regarding digital assets are a direct response to the 2023 Law Commission report. The Ministry of Justice requested this report to identify any roadblocks preventing digital assets from being recognized as property under English and Welsh private law, and to suggest some handy solutions.

Prime Minister Keir Starmer appointed Tulip Siddiq as the new City Minister in a move that could shake up the UK's approach to financial services and cryptocurrency regulation. Announced on July 10, 2024, Siddiq’s appointment places her right at the heart of shaping the UK's financial policy, with a focus on overseeing the booming crypto sector.

While Siddiq has cautiously embraced blockchain technology’s potential, she's also made it clear that consumer protection in the crypto space needs a serious upgrade. In a 2022 article for New Statesman, she said:

Properly regulated crypto assets have the potential to transform our economy and financial services sector. Many innovative companies are using various forms of blockchain technology to increase transparency in finance and create highly skilled, high-paying jobs across the UK.
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