Property (Digital Assets etc) bill introduced into Parliament  

The Government has today introduced the Property (Digital Assets etc) Bill into Parliament. The Bill enacts the recommendations of the Law Commission of England and Wales. Its effect is to confirm the existence of a third category of personal property, into which crypto-tokens and other assets could fall.

The Bill is available here and has been introduced into the House of Lords under the special parliamentary procedure for Law Commission bills.

The Law Commission’s digital assets report in June 2023 concluded that certain digital assets, including crypto-tokens and non-fungible tokens (NFTs), are capable of attracting personal property rights. However, because they are fundamentally different both from physical assets, and from rights-based assets like debts and financial securities, they do not fit easily within traditional categories of personal property. The Commission recommended that legislation should confirm the existence of a “third” category of personal property. The Commission published a draft bill to implement this recommendation in July 2024.

The draft Bill makes clear that a thing is not prevented from being the object of personal property rights merely because it is neither a thing in action nor a thing in possession. This reflects the trajectory of recent case law, but removes the lingering uncertainty that remains in the absence of a definitive statement from an upper court.

The Government has also announced in a written statement today  that it accepts the recommendation to set up an expert group who can provide guidance on technical and legal issues relating to digital assets. The Ministry of Justice has asked the UK Jurisdiction Taskforce (UKJT), an expert group chaired by the Master of the Rolls that produces non-binding guidance on areas of legal uncertainty, to take forward this work.

The Law Commission’s recommendations on other matters including collateral arrangements for crypto-tokens are still under consideration.

Further information about the digital assets project, including recommendations, can be found on the project page. Further details about proposals in the Bill are here.