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The Law Commission has proposed draft legislation regarding a third category of personal property into which crypto-tokens and other assets could fall.
This is the latest stage in the Commission's work on law reform that is designed to ensure the law can accommodate both crypto-tokens and other digital assets in a way that allows the technology to flourish.
The reforms are intended to help create an environment that is more conducive to digital assets and their markets. They are also being shaped in a bid to support the government's stated goal of 'the jurisdiction of England and Wales becoming a global hub for digital assets, and in particular, for crypto-tokens and crypto-token systems'.
A Law Commission report published in June 2023 concluded that certain digital assets, including crypto-tokens and non-fungible tokens, are capable of attracting personal property rights. It also established that 'because digital assets differ significantly from physical assets, and from rights-based assets like debts and financial securities, they do not fit within traditional categories of personal property'. The Commission recommended that legislation should confirm the existence of a third category of personal property.