UK regulators have proposed a bill that would categorize crypto and digital assets as personal property.
The current lack of regulation around crypto has made it difficult for legal professionals to determine digital asset ownership during divorces and other disputes. Gaining further regulatory clarity should also make it easier to safeguard consumers and businesses from crypto fraud.
“It’s probable that the UK will implement provisions for the different types of crypto, as well as NFTs and tokenized real-world assets,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It’s a step in the right direction, particularly after the FTX, 3AC, and Celsius debacles, which have clouded crypto ownership.”
Leading Financial Innovation
Previously, UK personal property law included physical possessions like automobiles and jewelry and intangible assets such as stocks and intellectual property. The new bill aims to establish a category that will include crypto and digital assets, giving owners the same rights as those afforded to other types of personal property.
The UK has been a leader in financial innovation—the country has been an early adopter of open banking concepts like instant payments. The UK has also highlighted digital assets, including tokenization, stablecoins, and blockchain as key breakthroughs that will revolutionize finance.
U.S. Uncertainty
The same regulatory uncertainty surrounding crypto and digital assets exists in the U.S., but American legislators have been less amenable to crypto regulation. The U.S. Securities and Exchange Commission has classified crypto and digital assets as securities rather than commodities and has taken action against multiple crypto exchanges, alleging they are operating as unregistered securities brokers.
However, there have been positive moves by U.S. lawmakers, including the recent approval of bitcoin and ether ETFs. The launch of these ETFs has attracted significant inflows from some of the largest institutional investors in the world.
Still, the regulatory uncertainty has continued to weigh on the U.S. crypto industry, which still awaits the sort of framework that has been proposed in the UK.
“The UK bill is great news, and it brings it all back to ‘not your keys, not your crypto,’” Hugentobler said. “This should keep things moving in the right direction for crypto and digital assets personal property rights.”
