The era of technological advancement and the introduction of novel tech features led to the generational transformation of human civilization. Technology and its integration in various interdisciplinary areas redefined our understanding of the world.
Digital assets and their accumulation have shown significant growth since the introduction of new blockchain systems and decentralized financial plays. Digital assets are the type of data that has a significant value in a digital asset management system. The UK government has made a revolutionary movement in the digital asset ecosystem.
The introduction of the property bill will change the status of digital assets into personal property which will get the same legal protections and privileges. The authorities of the UK government have made a bold statement that, the law should be flexible enough and transformed and reshaped according to the evolving technologies. This movement will tear down all the traditional concepts of digital currency and tokens and introduce a new culture out of it.
Inclusion of digital assets in the UK Property Bill
September 11, 2024, will be remembered as one of the most revolutionary days in British history. The UK government introduced the Property Bill in the Parliament on September 11, 2024. This law will bring the cryptocurrencies, NFT(non-fungible tokens), and carbon credits under the personal property of English law. This integration will take digital assets to the next level, it will get the same treatment as physical assets and get legal protections as the rest.
The brief content of the bill is, that A thing is not prevented from being the object of personal property rights merely because it is neither a thing in possession nor a thing in action, here ‘A thing’ can be digital or electronic.
The inclusion of digital assets under the legal provisions will solve the confusion associated with the ownership settlement and inheritance controversy and be helpful to the judiciary system when cases with complexities associated with digital assets emerge.
This process will become eventually inevitable because blockchain transactions and decentralized financial crimes will increase in the future, so the need of a regulating law to prevent future atrocities will become mandatory. Providing security to the users will increase community engagement and be beneficial to the economy of the country.
Introduction of a new category of personal property?
The law of property in England and Wales has two categories, which are things in possession and things in action. Tangible things are generally included in the things in possession category whereas shares and debts are considered under the things in action category.
The explicitly differentiated nature of digital assets from these traditional assets excludes them from these categories. It can neither be added to the things in possession nor the things in the action category, so the bill is recommending the creation of a special category to accommodate it.
The discussions of whether digital assets be included under the law were started in 2020 by the Ministry of Justice asking the Law Commission to review the law and make space for accommodation based on the nature.
As a result of this, a new third category might be included in the law to accommodate digital assets giving the users legal protection against fraud and theft.
Conclusion
The introduction of the Property Bill will provide enhanced security to the users who hold digital assets and attract people around the country to come forward and participate in decentralized finance (DeFi). Apart from that, digital assets will earn an individual identity by including it in a separate category and will show clarity in the legal complexities associated with it.
The bill is still in its embryonic stage and requires a lot of upcoming process will only make it a fully fledge law. At the moment it is just an introduction and no legal strength to act on the country. The upcoming stages include the second reading, the committee stage, the report stage, the third reading, the other house, and finally Royal Assent.
The bill becomes law only after the Royal Assent. This could be a lengthy process and can take several months or even more than that since the amendment and inclusion of new categories is a complex process. It may not end up in law if it doesn’t get enough backing up from the parliament.
The decentralized finance system views this action plan of the UK as an initiative, which will be followed by other countries in the future and redefine the status and legal provisions of digital assets.
