The United Kingdom finally clarifies the legal status of cryptocurrencies and NFT...

Technologies are evolving at a dizzying pace. However, legislative frameworks sometimes struggle to keep up. Yesterday, Wednesday, September 11, 2024, the cryptosphere was abuzz as the British Parliament took a decisive step with a cryptocurrency bill. Titled Property (Digital Assets etc.) Bill, this bill aims to clarify the legal status of cryptocurrencies, NFTs, and other digital assets in the UK. This is a crucial issue for a country that aims to stay at the forefront of cutting-edge technology regulation.

A new legal category for cryptocurrencies

On September 11, 2024, the British Parliament presented a bill that introduces, for the first time, the legal recognition of cryptocurrencies as personal property. Indeed, the Property (Digital Assets etc.) Bill aims to create a third category of property under English law, in addition to tangible property (such as gold or a car) and debts (such as loans or shares). Heidi ALEXANDER, Minister of Justice, welcomed this initiative. “It is essential that the law keeps pace with technological advancements to keep the UK at the forefront of the international legal services sector,” he said. In this statement, he emphasized the strategic importance of this law for the country’s economy, particularly in emerging technologies such as cryptocurrencies.

The law is also the result of a report by the Law Commission, published in 2023, which highlighted the barriers to recognizing cryptocurrencies as legal property. Until now, these assets were in a gray area, exposing holders to risks in cases of fraud or litigation. With this new classification, cryptocurrency owners will benefit from enhanced legal protection, particularly in complex judicial proceedings or divorce cases, where these assets are increasingly incorporated.

Enhanced protections and economic prospects

Beyond legal recognition, this law introduces concrete measures to protect cryptocurrency holders against fraud and scams. From now on, they can rely on a clear legal framework to assert their rights in cases of interference with their digital assets. Heidi ALEXANDER emphasized that this legislation “will help judges deal with complex cases where digital assets are contested,” notably in financial settlements such as mergers and acquisitions or divorces. This legal clarification is essential, as disputes involving cryptocurrencies are multiplying as their adoption increases.

From an economic perspective, this bill is also designed to attract more investment in the digital technology sector and strengthen the UK’s position as a global leader in blockchain-related legal services. Indeed, the UK legal services industry is already worth £34 billion a year. This legal update aims to maintain this momentum through arbitration and mergers. Thus, this modernized legislative framework will allow the City of London to remain competitive on the global stage and attract new players in the cryptocurrency and blockchain sector.

With the passing of this law, the UK positions itself as a pioneer in cryptocurrency regulation, enhancing both its competitiveness and the security of its economic actors. Cryptocurrency holders and businesses now benefit from increased protection in a legal framework that keeps pace with technological advancements. Thus, the future of cryptocurrencies in the UK looks promising, but there is no doubt that other legal challenges will arise on the horizon.