For pioneering investors, the early years of cryptocurrency involved building up digital assets as an act of faith, with little or no means of easily converting them into liquid assets, but with the hope that the wealth would eventually become something tangible and of lasting value, offering real liquidity. That hope has now been fulfilled.
Initially, a few high-end vendors in sectors such as luxury hotels, expensive watches, and cars began accepting cryptocurrency instead of fiat currency.
But the XRPaynet Card, with its capacity to turn cryptocurrency straight into fiat currency, has been a complete game changer, opening up a new world of spending opportunities.
What Is The Legal Status Of Crypto In The UK?
A question that may be asked at this point concerns where this now leaves cryptocurrency.
Is it, for XRPaynet Card holders, hardly different from fiat currency traded on the Forex markets, being a liquid asset akin to money that could be held in a bank and drawn down at any time? Or does it remain an asset that fits another category, maybe even one of its own?
This question is relevant in many ways, not least because of the tax status of such assets. In the UK, these are treated as an asset in the same way as property, rather than currency. This means that trades and transactions involving cryptoassets are subject to capital gains tax.
However, that status has been arrived at not by design, but through a process of court rulings and case-by-case decisions. In order to prevent this leading to any ambiguity, uncertainty or legal challenge, the UK government has now passed the Property Act (Digital Assets etc).
What Does The New Digital Assets Law Establish?
The new law makes clear that an item does not lose property rights just because it is electronic, rather than physical.
This confirms by statute the treatment of digital assets as property. However, it should be noted, this does not in any way stop you from using the XRP Card to turn crypto into fiat currency, be it the pound sterling or any of the many currencies it can convert to overseas.
Instead, as Analytics Insight notes, it creates a firm legal footing to protect crypto under property law. It means, for example, that it can be recovered in legal disputes, as well as owned and transferred in the same way as other property, from homes and cars to the family silver.
Organisations such as CryptoUK welcomed the news as proving legal clarity and certainty, enabling stolen crypto to be retrieved and also ensuring that anyone needing to take legal action or simply to assert their rights could do so knowing exactly what the legal position is. Ambiguities over common law or case law are no longer a potential problem.
In one sense, the status of crypto is not really different from before, since it was already regarded as property for tax purposes. But in another way, it now has certainty in a way it did not previously.
It also marks a further step in the process by which the UK government, along with various others around the world to varying extents, has sought to respond to the rise of crypto with a clear framework of regulations and legal definitions, preventing a ‘wild west’ in which the use of crypto might fall through the cracks between regulations designed for other things.
Is The UK Catching Up On Crypto Regulation?
As the Analytics Insight article noted, the UK authorities have sometimes been accused of dragging their feet when it comes to cryptocurrency regulation in comparison with Europe and the US. With over 12 per cent of Britons now holding cryptoassets, this situation was unsustainable.
The drive for more regulation has been very notable over in the US, where the pro-crypto approach of the second Trump administration has been made clear. This has included the GENIUS Act, which provides for the first federal regulatory system for stablecoins. This is part of the administration’s stated aim of making the US the “crypto capital of the world”.
Britain is not looking to contest that status, but rather to partner in it. Earlier this year, the UK announced new rules to bring crypto regulations close to those of standard finance, as well as pursue regulatory alignment with the US.
What all this achieves is to place crypto on an ever more certain legal and regulatory footing, both here and in the US. This can help thwart rogue actors and bring more safety and certainty to the holding of digital assets.
A regulatory climate in which the risks involved in crypto investment are confined to market movements and not legal shortcomings or ambiguities is one in which such investments become far more attractive. With an XRP Card to help you spend it, the reasons for investing in crypto have now become much more compelling.