皇冠体育app

Overview

This short Bill clarifies that certain digital assets, such as crypto-tokens, can be recognised as property, even if they do not fit into the two traditional categories of personal property recognised by the law. 皇冠体育app Bill extends to England and Wales, and Northern Ireland.

This will help provide certainty and protection for people and businesses who own and transact with these assets.

What does the Bill do?

皇冠体育app Bill confirms that certain digital assets 鈥� such as crypto tokens 鈥� can attract property rights even if they do not fit into the two traditional categories of personal property recognised by the 聽law (please see details in the policy context section below).

In doing so, the Bill is responding to technological developments so that people and businesses who use these assets have appropriate legal protections. This will bring practical benefits for those individuals and businesses (detailed below).

This Bill deliberately does not state what digital assets fall within any further category of personal property rights or how the law will treat them. Instead, these details will be developed by the courts, who can deal with issues on a case-by-case basis. This is preferable to setting out firm rules in legislation, which would be less able to respond flexibly to new circumstances and technological developments. Personal property law has always been developed by the courts through our common law rather than in legislation. 皇冠体育app Bill supports this established approach.

What are the benefits of the Bill?

皇冠体育appre are several practical advantages to the Bill, including:

• Ensuring that crypto-tokens and potentially certain other digital assets can be properly recognised by the law as personal property. This helps provide certainty and protection for people and businesses who own and transact with such assets. Property rights are important in achieving this. If personal property is stolen, its owner will have rights and remedies under the law. Personal property can also be part of a person鈥檚 estate for inheritance purposes, be available to creditors if a business goes bust, or be used as security for a loan.
• Decreasing litigation courts by removing the need to decide whether something can be property even if it does not fall into the traditional categories of personal property;
• Ensuring that the jurisdiction of English and Welsh and Northern Irish law continues to be an attractive place to deal with and litigate in respect to crypto-assets and other 鈥渢hird category鈥� things.

Policy context and Bill Development

Traditionally, the law of personal property in England and Wales (and in Northern Ireland) has been split into two categories:

• things in possession (generally, tangible things like gold bars), or
• things in action (personal property that can only be claimed or enforced through a court action, like a debt or contractual right).

Certain digital assets, particularly crypto-tokens, display the characteristics of property under the common law. For example, the technology used to create crypto-tokens means that they cannot be duplicated or 鈥渄ouble spent鈥�, which makes them different from other data. However, they do not easily fit into either traditional category of personal property. Because they cannot be physically possessed, they do not fall into the category of things in possession. However, they also cannot be things in action because their existence is not dependent upon their recognition by a legal system and claims made in relation to them.

Although there is some case law in the High Court that has found that certain digital assets, specifically crypto-tokens, can be property even if they are neither a thing in possession nor a thing in action, this is not definitive for the common law. 皇冠体育appre remains lingering uncertainty caused by comments in old case law that said the two categories of personal property are exhaustive, and that there can be no 鈥渢hird category鈥�.

In response to this uncertainty, the Ministry of Justice commissioned the Law Commission for England and Wales to consider this issue. 皇冠体育app Law Commission undertook extensive consultation on the issue of whether the law does or should regard crypto-tokens and potentially certain other digital assets as property. 皇冠体育app Law Commission concluded that crypto-tokens and potentially other types of digital asset had the characteristics of property, and recommended legislation to confirm that such assets could attract property rights despite not falling within the traditionally-recognised categories of personal property.

A majority of consultees who responded to the Law Commission, including senior and specialist judges, lawyers, and technology companies, supported legislation in this area, on the basis that it would facilitate the law鈥檚 continued development in this area.

Following this consultation, the Law Commission published this Bill in draft form, which confirms that a thing can attract property rights even if it is not a thing in possession or a thing in action. 皇冠体育app Bill is a means of 鈥榰nlocking鈥� the development of the common law. It confirms the approach taken in recent High Court judgments^{[footnote 1]}.

皇冠体育appre are many different kinds of digital assets with different features, including crypto-tokens, non-fungible tokens, virtual carbon credits, digital files and domain names. 皇冠体育app common law tests for property will be applied by the courts to each specific digital asset. This means that only things with the necessary characteristics of property will be recognised as attracting property rights. 皇冠体育app Law Commission identified crypto-tokens as the main type of digital asset likely to fall into the third category.

皇冠体育app Bill鈥檚 passage through Parliament to date and update to territorial extent

皇冠体育app Bill has now passed through the House of Lords, with two amendments since introduction. 皇冠体育appse are:

1. Extending the territorial extent of the Bill to Northern Ireland and;
2. Amendment to the long title of the Property (Digital Assets Etc.) Bill, to make the long title鈥檚 drafting consistent with the operative clause.

皇冠体育app Northern Ireland Assembly passed a legislative consent motion on the 18th March聽 giving the UK parliament formal consent to legislate. 皇冠体育app extent of the Bill has therefore been amended to include Northern Ireland. 皇冠体育app Scottish Government has consulted separately on the question of recognising crypto-tokens as property under Scots law.

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