On 2 December 2025, the Property (Digital Assets etc) Act received royal assent, meaning cryptocurrencies and stablecoins have officially been recognised as legal property under English law. Until now, common law had often treated digital tokens as property, but only through scattered judgments. This legislative change not only clarifies the legal status of these assets but also provides crucial protections for investors, opening up new possibilities for the ownership, transfer, and recovery of digital assets.
Before the Bill’s passage, digital assets like cryptocurrencies were in a somewhat ambiguous legal position. They didn’t neatly fit into the traditional categories of personal property recognised under English law. Typically, personal property is classified into two broad categories: ‘things in possession’ such as physical items and ‘things in action’ which are personal property that can only be claimed or enforced through a court action, such as debts or rights to sue). This binary framework had made it challenging to definitively determine the legal status of digital tokens, which are intangible and not easily classified as either a thing that can be possessed physically or something that can be enforced only through legal action.
What does the Property (Digital Assets etc) Act do?
The Property (Digital Assets etc) Act changes this by establishing a new category of personal property that explicitly accommodates digital and electronic assets. This change allows digital assets, including cryptocurrencies and stablecoins, to be treated as personal property, giving them the same legal standing as traditional assets like cash or real estate. By doing so, the law removes the uncertainty surrounding the ownership and legal treatment of these assets, which has previously been shaped primarily by court rulings in individual cases. The Act should make it easier for courts to settle disputes over digital asset ownership, inheritance, and fraud, all of which are becoming increasingly common issues as digital assets proliferate.
The law follows the recommendations of the Law Commission for England and Wales, which had been tasked with reviewing whether crypto-assets and other digital assets should be classified as personal property under English law. The Commission had noted that digital assets did not fit easily into the existing legal categories but still deserved recognition as property. This new law provides statutory confirmation that digital assets are capable of being owned, inherited, and protected as property, even if they do not fit into the traditional categories.
New investor protections for cryptocurrency
One of the most important aspects of this legislation is its impact on investor protection. The formal recognition of digital assets as property strengthens the legal rights of those who hold them, making it easier to resolve disputes related to ownership, theft, fraud, or inheritance. This is crucial as the UK continues to position itself as a hub for digital finance. According to financial regulator data, around 12% of UK adults now hold some form of cryptocurrency, and that number is expected to grow. As the market for digital assets expands, having clear and enforceable property rights will help foster investor confidence, knowing that their assets are legally protected.
In addition to recognising digital assets as property, the UK government is considering overhauling the way decentralized finance (DeFi) activities are taxed. This includes a proposal that would spare users from triggering capital gains tax each time they deposit tokens into lending protocols or liquidity pools. Such changes aim to make the UK’s tax system more compatible with the emerging DeFi ecosystem, which operates differently from traditional financial systems.
What about cryptocurrency in Scotland?
The Property (Digital Assets etc) Act does not extend to Scotland. Under current Scots law the legal position of cryptocurrencies and other digital assets remains unsettled and uncertain. Because crypto‑tokens are a relatively new phenomenon, Scottish courts have had little opportunity to build a body of case law on whether and how these assets constitute “property” under Scots private law.
However the Digital Assets (Scotland) Bill was introduced in the Scottish Parliament on 30 September 2025, aiming to formally recognise that “digital assets” can be treated as property under Scots private law. It defines digital assets as incorporeal moveable property created via an electronic system that ensures uniqueness and prevents double‑use. As of now the Bill remains at Stage 1, meaning it is under initial consideration by the Economy and Fair Work Committee and has not yet completed parliamentary scrutiny or become law. There is an election to the Scottish Parliament in Spring 2026, and if the Bill does not pass prior to the dissolution of Parliament, it will have to be reintroduced.
Therefore the treatment of digital assets under Scots law remains heavily dependent on the particular facts of a case, including how the asset is held, whether one can prove “control” (for example via private keys), and what rights exist under contract or other arrangements.
While cryptocurrency has received legal protections under English law with the passage of the Property (Digital Assets etc) Act, for the time being crypto‑holders in Scotland face legal uncertainty. While many relevant legal principles can be adapted to digital assets, there is no dedicated statutory regime, making enforceability, transfer, recovery, inheritance or creditor claims potentially complicated and inconsistent.
What does the change in English law mean for crypto compliance?
For compliance professionals, this new law has several important implications. The recognition of digital assets as property means that organisations will need to ensure that their policies and procedures for managing digital assets are in line with the updated legal framework. This includes reviewing how digital assets are treated in contracts, how ownership is documented, and how digital assets are protected in the event of fraud or insolvency. Additionally, firms will need to be aware of the broader regulatory changes that are coming down the pipeline, such as those related to crypto donations and DeFi taxation.
While the recognition of digital assets as property provides much-needed clarity, it’s important to acknowledge that risks remain. The volatility of cryptocurrencies, potential for fraud, regulatory uncertainties, and the evolving legal landscape pose ongoing challenges. Organisations must remain vigilant and proactive in managing these risks, ensuring robust security measures, staying informed about regulatory changes, and implementing comprehensive risk management strategies to safeguard against potential losses and legal complications.