The United Kingdom has created a new category for crypto assets, recognizing them as a legitimate form of digital investment. This move is set to increase confidence in the burgeoning industry, attract more investors and provide a clear regulatory framework for those operating in the space. The new category will allow cryptocurrencies to be classified as property and subject to specific regulations and tax rules, making them more accessible than ever before. With the UK’s financial watchdog taking a proactive stance towards the crypto industry, it is hoped that this move will fuel further innovation and investment in this exciting new field.
The rise in the adoption of cryptocurrency around the globe has resulted in different jurisdictional classifications and regulations for digital assets. Legislative rules are used by regulatory agencies and authorities to determine the scope of transactions and the type of crypto tokens. The UK has been making efforts to establish a comprehensive framework for its digital industry, and it recently introduced a new tax category for digital assets in tax return forms. The UK Treasury made the announcement in a report for the national budget for Spring 2023, stating that the change in the tax form was necessary to ensure citizens declare profits from digital assets separately. The UK plans to use crypto taxation revenues to fund public programs, and the change has been welcomed by the UK Chartered Institute of Taxation. The added field to separate digital assets will enhance awareness of crypto gain declarations among self-lodgers, according to Maryna Kovalenko, co-founder of a crypto accounting firm. Senior Counsel and Director of Global Regulatory Matters at ConsenSys, Bill Hughes, sees the change as a positive step.