The Law Commission of England and Wales has proposed a regulation to establish a new category of personal property for cryptocurrencies. If implemented, this initiative would provide a clear legal framework for assets like cryptocurrencies and NFTs.
Crypto and NFTs Might Attract Property Rights
The proposed draft Bill seeks to confirm the existence of a third category of personal property, distinct from the traditional classifications of “things in action” and “things in possession.” This new category would encompass digital assets that don’t neatly fit into existing legal definitions, such as cryptocurrencies and NFTs.
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Following a consultation period in February 2024, the Commission has refined the wording of the draft bill. The proposed legislation aims to remove uncertainties in the absence of definitive statements from appellate courts.
This move builds upon the Commission’s June 2023 report on digital assets, which concluded that certain digital assets can attract personal property rights. However, their fundamental differences from physical assets and rights-based assets like debts and financial securities necessitated a new legal classification.
The implications of this proposal are far-reaching. By providing legal clarity, it could boost investor confidence in digital assets. This could potentially stimulate growth in the UK’s blockchain sectors. Moreover, it could offer greater protection for holders of these assets.
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