Millions of crypto owners have gained stronger legal protection as the Property (Digital Assets etc) Act received Royal Assent this week.
England, Wales and Northern Ireland are among the first countries in the world to confirm in law that digital assets – such as cryptocurrency or non-fungible tokens – can now be recognised as personal property.
This will provide greater protections and ensure they are treated like traditional assets.
The Government said the development means that FinTech companies are more likely to choose England, Wales, or Northern Ireland as places to do business.
Minister for Courts and Legal Services, Sarah Sackman KC MP, said: ”This new law will keep Britain at the heart of the international legal industry. By clarifying the status of digital assets, we remove uncertainty, simplify disputes, and cement the UK’s position as the centre for FinTech innovation.”
Historically, the law in this country has recognised two categories of property: ‘things in possession’ such as gold, cars, mobile phones, and ‘things in action’, which are legal rights, for example, debts and shares.
This new law allows for the development of a further category to allow for certain digital assets to have personal property while recognising their unique characteristics.
This means that as well as providing greater protection against scams, digital assets like cryptocurrency can be passed down through inheritance and recovered by creditors during bankruptcy, just like traditional assets.
With cryptocurrency fraud rising, owners also have clearer legal rights if their assets are stolen.
The reforms also reduce costly disputes by giving businesses legal certainty over the status of their crypto, bringing them into the same framework as jewellery and other goods.