Property (Digital Assets etc) Bill [HL]

23. Clause 1 provides that a thing (including a digital or electronic thing) will not be deprived of legal status as an object of personal property rights merely by reason of the fact that it is neither a thing in action nor a thing in possession. Things that are neither things in action nor things in possession may therefore be recognised as attracting property rights. There may be other reasons, however, why a thing cannot be personal property – such as the thing in question not satisfying the indicia for personal property generally. The effect of this clause is not to say that any and all "things" are property.

24. The Bill is not intended to, and deliberately does not, confirm the status of any particular type of thing (including a crypto-token) as the object of personal property rights. In particular:

• a. it does not attempt to say what things are, in fact, objects of property rights despite not being things in possession or things in action; and
• b. it does not attempt to detail what the implications of such proprietary recognition would be (such as tortious liability, applicable remedies etc).

25. These matters are left to development by the common law. Personal property rights are traditionally creatures of common law and have been developed by the courts over hundreds of years. The common law approach has allowed for a highly nuanced and flexible approach which is not possible to achieve in statute. The Bill is intended only as means of "unlocking" the development of the common law by removing the uncertainty stemming from Colonial Bank v Whinney,11 without unduly restricting the way in which it can then respond to technological developments and new types of assets.

26. Although the Bill is deliberately agnostic about the characteristics of third category things, it does refer expressly to things that are "digital or electronic in nature" as things that could potentially be capable of attracting property rights despite not necessarily being things in possession or things in action. Although this reference is not necessary in legal terms, it is included for context because digital things such as crypto-tokens are likely to be the main type of thing that users of the law will be concerned with, at least in the short to medium term, and because they were the main impetus for the Bill. It is important to note, however, that there is nothing in the Bill to restrict its impact to digital things; nor does it mean that any particular kind of digital thing will necessarily be found to be property.

27. Clause 2(1) sets out the territorial extent of the Bill. The Bill extends to England and Wales and Northern Ireland.

28. Clause 2(2) makes provision about the coming into force of the Act. The Act comes into force on the day on which it receives Royal Assent.