Laura WilesThe Property (Digital Assets etc) Bill had its first reading in the House of Lords on 11 September. The Bill provides that digital assets can be considered to be personal property, and may therefore be given the same legal protections as other property. Such digital assets covered by the bill would include carbon credits, cryptocurrencies, and non-fungible tokens.
The Bill responds to the Law Commission’s 2023 report, which reviewed legislation on digital assets in order to assess whether the law of England and Wales required reform to ensure that it could accommodate such assets. The report concluded that while common law was generally sufficiently flexible and able to do so, some assets were not easily categorised under existing personal property rights. It recommended reform to codify the common law position in order to provide for personal property rights attaching to digital assets.
In a statement responding to the Law Commission’s report, and made on the same day as the Bill’s first reading, the Government highlighted that certainty over legal issues around digital assets will hopefully encourage the use of English and Welsh law in internationally mobile transactions.
The Government has also actioned the report’s second recommendation for an expert group to be created on the control of digital assets. The UK Jurisdiction Taskforce will take this forward.
Finally, the Government noted that HMT are currently reviewing the Law Commission’s recommendations to amend the Financial Collateral Arrangements Regulations and set up a multi-disciplinary project to formulate a statutory framework for the entering into, operation and enforcement of certain crypto-token and crypto asset collateral arrangements.