What Does the UK Property (Digital Assets etc) Act 2025 Mean for Digital Assets?

On 2-12-2025, the United Kingdom (‘UK’) gave Royal Assent to the Property (Digital Assets etc) Act 2025, to formally recognising digital and electronic assets as capable of being objects of personal property rights.

This Act came into force on 2-12-2025.

What are Digital Assets?

According to the UK government, digital assets are a broad class of assets represented and transferred electronically, often using technologies like distributed ledgers and cryptography.¹

Digital assets have increasingly become vital, serving as payment methods, stores of value, and representations of rights, enabled by technologies like cryptography, smart contracts, and distributed ledgers. Despite their growing use, legal uncertainty persists because they do not fit traditional property categories, creating risks in ownership and enforcement.

What were the concerns?

Originally, laws in the UK classified property into two categories:

1. Things in possession

2. Things in action

Digital assets, however, did not fit into either category. Recognising this, the UK Government tasked the Law Commission to recommend reforms ensuring the law accommodates crypto-tokens and other digital assets.

The Law Commission’s 2023 report highlighted this gap and recommended statutory clarification to avoid uncertainty in ownership, inheritance, and dispute resolution.²

The Law Commission noted that digital assets differ fundamentally from physical and rights-based assets, making them hard to fit into traditional property categories. It recommended legislation to confirm a “third category” of personal property, which this Act now establishes, leaving courts³ to define its scope.

Professor Solène Rowan, Commissioner for Commercial and Common Law⁴ stated on this Act:

“The passage of the Property (Digital Assets etc) Act 2025 keeps the law of England and Wales at the forefront of legal development. This new Act, which is based on our recommendations, will enable the courts to develop the law in ways that accommodate the unique features of these emerging assets, while ensuring that they can be protected as objects of property rights. This will enhance the rights of users of crypto-tokens and improve legal certainty for individuals and businesses.”

What are the new provisions?

1. The Act confirms that anything, including digital or electronic items, can be the subject of personal property rights, even if it does not fall under the traditional categories of:

   • a thing in possession, or

   • a thing in action.

2. This provision ensures that digital assets such as crypto-tokens and other electronic items can be categorised as Property.

3. They can attract property rights even if they do not fit conventional definitions.

4. By recognising digital assets as property, the Act removes lingering uncertainty and provides clarity for courts and market participants, ensuring that digital assets are legally recognised as property.

5. The Act deliberately avoids defining the boundaries of this new category, leaving courts to develop case law. This flexible approach ensures adaptability to future technological advancements.⁵

6. The Act applies to England, Wales, and Northern Ireland.