British regulators have proposed a bill that would classify cryptoassets and digital assets as personal property.
The current lack of regulation around cryptocurrencies makes it difficult for lawyers to determine ownership of digital assets in divorce or other disputes. Greater regulatory clarity should also make it easier to protect consumers and businesses from cryptocurrency fraud.
“It’s likely that the UK will implement provisions for different types of cryptocurrencies, as well as NFTs and tokenized real assets,” said Joel Hugentobler, a crypto analyst at Javelin Strategy & Research. “This is a step in the right direction, especially after the FTX, 3AC and Celsius debacles, which cast a shadow over crypto ownership.”
Leader in financial innovation
Until now, UK personal property legislation has included physical assets such as cars and jewellery, as well as intangible assets such as shares and intellectual property. The new bill aims to establish a category that will include cryptoassets and digital assets, granting owners the same rights as those granted to other types of personal property.
The UK is a leader in financial innovation. The country was an early adopter of open banking concepts such as instant payments. The UK has also highlighted digital assets, including tokenization, stablecoins and blockchain, as key advances that will revolutionize finance.
Uncertainty in the United States
The same regulatory uncertainty surrounding cryptoassets and digital assets exists in the United States, but U.S. lawmakers have been less receptive to regulating cryptoassets. The U.S. Securities and Exchange Commission (SEC) has classified cryptoassets and digital assets as securities rather than commodities and has taken action against several cryptocurrency exchanges, alleging that they operate as unregistered broker-dealers.
However, US lawmakers have taken some positive steps, including the recent approval of Bitcoin and Ether ETFs. The launch of these ETFs has attracted significant inflows from some of the world’s largest institutional investors.
However, regulatory uncertainty continues to weigh on the US crypto industry, which is still waiting for the kind of framework proposed in the UK.
“The UK bill is great news, and it brings everything back to the question of ‘not your keys, not your crypto,’” Hugentobler said. “This should move things in the right direction for personal property rights for crypto and digital assets.”
