UK Passes Law Recognizing Digital Assets as Personal Property
- UK law now classifies digital assets as personal property, improving clarity and ownership.
- Clear property rules strengthen asset recovery and support fair treatment in legal disputes.
- Defined crypto rights aim to boost innovation and attract investment in UK digital markets.
The United Kingdom has enacted the Property (Digital Assets etc) Act 2025. The law confirms that digital assets such as cryptocurrencies and stablecoins count as personal property under UK law. Lord Speaker John McFall told the House of Lords that the bill gained royal assent, and King Charles III gave final approval.
The act implements recommendations from the Law Commission of England and Wales in 2024. Lawmakers wanted to remove uncertainty over how courts treat digital assets in disputes and to give businesses a clear legal framework.
Under the digital asset property law, courts no longer rely only on earlier case law. Judges no longer decide crypto property status one case at a time. Parliament now states in statute that digital or electronic “things” can sit within the system of personal property rights. Industry bodies such as CryptoUK say the change should support more predictable outcomes in litigation involving digital assets.
Redefining Personal Property to Include Digital Assets
Traditional UK personal property law recognises two main categories. A “thing in possession” covers tangible items, while a “thing in action” covers enforceable rights such as contractual claims. Many crypto assets did not fit neatly into either group. The act confirms that a digital or electronic item does not fall outside property rights simply because it belongs to neither category.
The legislation reflects the Law Commission’s view that some digital assets share features of both existing categories. It further recognizes that courts and practitioners need a clearer framework. Tokenized assets, stablecoins, and other on-chain instruments now see wider use in commerce. This structure should assist judges when they assess ownership questions or competing claims over wallets and tokens.
By endorsing a third category of personal property, the UK aligns legal concepts with current technology. The clarification may shape debate in other jurisdictions. Many still rely mainly on case law or have not yet passed dedicated digital asset statutes.
Related: UK to Expand Crypto Reporting Rules for Residents by 2026
Greater Legal Certainty For UK Crypto Users and Markets
Industry advocates say the crypto property law strengthens legal protection for UK cryptocurrency users. Clear recognition of digital assets as property should support efforts to recover stolen or misdirected crypto through civil proceedings. It also helps define how administrators treat such assets during insolvency or when managing estates after death.
The Financial Conduct Authority estimates that around 12% of UK adults hold some form of cryptocurrency. Regulators and lawmakers view this participation as a reason to update rules. The new statute sits alongside plans for a dedicated UK crypto regulatory regime. That regime will place many crypto businesses under rules similar to those of other financial firms.
Supporters also expect legal clarity around ownership and transfer of digital assets to help the UK attract more investment. The establishment of digital assets as property must be used to legally reclaim stolen or mismanaged crypto assets in a court of law. It also assists in specifying how administrators handle such assets in the event of insolvency or when handling estates upon death.
The impact of the Property (Digital Assets etc) Act 2025 will depend on how courts apply it in future disputes. It will also depend on how regulators coordinate it with upcoming conduct and prudential rules. Market participants now monitor early cases and guidance. They want to see how the new digital asset property framework works in practice. Many also watch how it influences the United Kingdom’s position as a hub for crypto and fintech.
