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On December 2, 2025, the Property (Digital Assets etc) Act 20251 received Royal Assent and came into force. The Act aims to reform English law to ensure that it is capable of accommodating digital assets2 in a way which allows this type of technology to flourish. England, Wales and Northern Ireland are among the first countries in the world to confirm in law that digital assets such as cryptocurrencies or non-fungible tokens can now be recognized as personal property. Millions of crypto owners have gained stronger legal protection as result of the Act coming into force, which we expect will boost the UK's position as one of the world's largest crypto markets.
Following the UK Law Commission's recommendations3 (see our July 2025 OnPoint "Crypto Chronicles: Navigating Legal Developments in the UK and U.S."), the Act provides that "a thing that is digital or electronic in nature" may be capable of attracting property rights even if it does not fit into either of the two categories of personal property that have traditionally been recognized under English law: things in possession (generally, tangible things) and things in action (personal property that can only be claimed or enforced through a court action, such as debts, shares or contractual rights). As it is widely accepted that cryptoassets do not neatly fall within these two categories, the Act removes uncertainty as to their legal status and gives the English courts the ability to develop a third category of personal property in ways that accommodate the unique features of these emerging assets, while ensuring that they can be protected as objects of property rights. This means that as well as providing greater protection against crypto fraud (for example, through obtaining proprietary injunctions and freezing orders), digital assets like cryptocurrency can be passed through inheritance and recovered by creditors during bankruptcy, like traditional assets.
By clarifying the status of digital assets and removing uncertainty, the Act will simplify disputes involving digital assets and cement the UK's position as the center for fintech innovation.
Footnotes
1. http://legislation.gov.uk/ukpga/2025/29/enacted.
2. "Digital asset" is an extremely broad term, encompassing a variety of things such as digital files, digital records, email accounts, digital carbon credits, cryptoassets and non-fungible tokens (NFTs). The UK Law Commission's recommendations only apply to a subset of digital assets, of which the main one is crypto-tokens. In its consultation paper, it proposed that a thing should be capable of falling within the proposed third category of a 'thing to which personal property rights can relate' if: (i) it is composed of data represented in an electronic medium, including in the form of computer code, electronic, digital or analogue signals; (ii) it exists independently of persons and exists independently of the legal system; and (iii) it is rivalrous.
3. The Law Commission's recommendations on other matters including collateral arrangements for crypto-tokens are still under consideration.
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