Nations Move to Solidify the Legal Status of Digital Assets Amid UK’s Groundbreaking Bill

As the UK advances its Property (Digital Assets etc) Bill, a growing number of countries are following suit, seeking to clarify the legal status of digital assets such as cryptocurrencies (ex. Bitcoin, Ethereum, Solana, Pecu Novus, Avalanche, Tether), non-fungible tokens (NFTs)(ex.. digital art, videos, collectibles), and tokenized real-world assets (RWAs)(ex. real estate, auto, physical goods) . The UK’s legislation, which treats these assets as personal property for the first time under British law, signals a major shift in the global legal landscape. Across the world, governments are introducing similar laws to protect digital asset owners and provide legal frameworks for resolving disputes.

United States: A Patchwork of Regulations

In the United States, the recognition of digital assets as property varies at both the state and federal levels. Wyoming leads the charge with its 2019 Digital Asset Law, which classifies cryptocurrencies and tokenized assets as property, covering virtual currencies and digital securities. Other states, like New York and Texas, have also begun exploring specific regulations for digital assets, but no uniform federal law has emerged.

At the federal level, agencies like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are actively developing regulations for cryptocurrencies. However, these are largely focused on securities law and market oversight rather than on property rights. Still, federal initiatives signal that broader regulatory frameworks could be on the horizon.

European Union: Unified Regulation with MiCA

The European Union is on the verge of finalizing its Markets in Crypto-Assets (MiCA) Regulation, which will serve as a comprehensive legal framework for digital assets across member states. Although MiCA focuses heavily on market oversight, it establishes clear definitions and protections for digital assets, ensuring they are treated as legal property under EU law.

In tandem with MiCA, individual countries like Germany have passed national laws allowing banks to offer cryptocurrency custody services. Germany’s 2020 legislation also recognizes cryptocurrencies as financial instruments, further embedding digital assets into the mainstream financial system.

Singapore: Pioneering Digital Asset Property Rights

Singapore is considered a global leader in the legal recognition of digital assets. The city-state’s Payment Services Act (PSA) provides a robust framework for cryptocurrency exchanges, enforcing anti-money laundering (AML) and counter-terrorist financing (CFT) regulations. Additionally, in a landmark 2020 court case—Quoine Pte Ltd v B2C2 Ltd—Singaporean courts ruled that Bitcoin could be classified as property, offering legal clarity on ownership disputes involving digital assets.

Japan: Early Adoption with Legal Protections

Japan has been at the forefront of digital asset regulation since 2017, when it introduced its Payment Services Act, which provides legal definitions for “virtual currencies” and requires cryptocurrency exchanges to register with the Financial Services Agency (FSA). Japanese courts have further reinforced the idea that cryptocurrencies are property, treating them as intangible assets under civil law.

Switzerland: Crypto-Friendly Laws

Switzerland is renowned for its crypto-friendly regulatory environment. In 2021, the country passed its Blockchain Act, which formalizes how digital assets—such as tokenized securities—are treated under property law. Switzerland’s recognition of “ledger-based securities” ensures that cryptocurrencies are protected as property, allowing businesses and investors to engage in blockchain transactions with confidence.

Australia: Legal Clarity for Tax Purposes

Australia has taken significant steps to treat cryptocurrencies as property, primarily for tax purposes. Under guidance from the Australian Taxation Office (ATO), digital assets like Bitcoin are classified as property and subject to capital gains tax. This legal clarity extends to disputes, where courts have recognized cryptocurrencies as property that can be seized or used to settle debts.

Canada: Recognizing Cryptocurrencies as Property

Canada is another country recognizing digital assets as property. Courts have treated cryptocurrencies as assets that can be seized or utilized in legal settlements. Moreover, the Ontario Securities Commission (OSC) regulates the trading and management of cryptocurrencies, ensuring that these assets fall under existing property laws.

China (Hong Kong): A Progressive Approach

While mainland China has banned cryptocurrency trading, Hong Kong has embraced a more open approach. The Securities and Futures Commission (SFC) has issued regulations treating some digital assets as “securities.” Hong Kong courts have also recognized cryptocurrency as property that can be recovered or used in legal disputes, setting a legal precedent for ownership rights.

Global Shift Towards Digital Asset Recognition

Countries like South Korea, New Zealand, and Brazil are also defining the legal status of digital assets, though their focus is more on regulatory frameworks than on explicit property laws. Nonetheless, the trend is clear: digital assets are gaining formal recognition as property worldwide, ensuring greater legal protection for owners and businesses involved in the digital economy.

The UK Leading the Charge

With the UK’s new Property (Digital Assets etc) Bill, the nation aims to solidify its role as a global leader in the emerging digital economy. By recognizing cryptocurrencies, NFTs, and tokenized RWAs as personal property, the UK is not only protecting owners but also setting a benchmark for other countries to follow. As digital assets become more integrated into global financial systems, this trend of legal recognition is likely to accelerate, bringing clarity and security to the rapidly evolving world of digital property.

Adele Simmons
Financial Desk