Crypto Assets Get Recognition in England, Law Commission Advises the UK Government to Classify Them as a New Kind of Personal Property

Crypto assets are at the verge of getting a new classification in England. In its final report on digital assets, the Law Commission of England and Wales advised the UK government to classify all crypto assets as a new kind of personal property.

The Law Commission of England and Wales has suggested a new classification for crypto assets in England, advising the UK government to define all crypto assets as a new type of personal property, in its final report on digital assets.

The Law Commission is an independent body that examines and proposes changes to the law for England and Wales. It published an interim report in 2021, which highlighted the legal issues at stake for cryptoasset and the limitations of the current personal property classification.

Crypto assets to gain legal status in England

Crypto assets have seen a huge uptake in the UK among investors. As of 2023, 6.1% of UK adults, or around 3.3 million people, had invested in bitcoin. This shows that crypto users in the UK have increased by 103%, up from early 2018 when only 3% of the population or around 1.5 million people owned cryptocurrencies.

Thus, to encourage innovation, competition and consumer protection in the rapidly evolving and volatile crypto-asset market, the UK is developing a regulatory framework. The key concerns for the regulators are that cryptoasset use can expose investors and consumers to several risks, including theft, fraud, market manipulation, hacks and loss of funds.

Bank of England to begin rolling out CBDC

The new law to treat crypto assets as personal property comes as the Bank of England is experimenting with CBDCs. The Bank of England (BoE) is reportedly conducting a new series of experiments on central bank digital currencies (CBDCs) for retail use.

“Central banks need to engage early with these developments and prepare for their implications,” the BoE said in a discussion paper on Tuesday, July 30, highlighting increasing innovations and risks in the payments industry.

The central bank will also be testing distributed ledger technology (DLT) along with the CBDCs. Global central banks are exploring how they can integrate the innovations into their operations amid the rise of cryptocurrencies and the DLT they are built on.

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