U.K. authorities plan to clarify how to classify cryptocurrencies under a new bill.

According to an official government notice, the British Parliament received a proposal to recognize digital assets as personal property under English law. The proposed bill would assign legal status to blockchain-powered holdings, including non-fungible tokens, tokenized real-world assets, and virtual currencies.

Justice Minister Heidi Alexander explained that the legislation introduces a new property category called “things in possession.”

Enshrined in this legal class are protections for crypto owners against bad actors and scammers. Both individual owners and institutions would be shielded from fraudulent practices, Minister Alexander said in a Sept. 11 statement. The lawmaker added that the bill would also simplify ownership disputes in cases such as divorce.

UK advances on crypto property bill 

The Property Bill marks one of the first crypto-related moves enacted by the Labour government led by Prime Minister Keir Starmer. It follows a consultation paper published by the Law Commission in February.

Law Commission experts recommended including digital assets under property law, particularly cryptocurrencies like Bitcoin (BTC). The concept may advance former prime minister Rishi Sunaks vision of transforming the U.K. into a global crypto innovation hub.

Elsewhere, crypto businesses struggled to meet requirements established by the Financial Conduct Authority. An annual report noted that 90% of digital asset applicants failed to match the FCA’s standards and only four of 35 entities qualified.