The UK Government has introduced the Property (Digital Assets etc) Bill (the “Bill”) which, if enacted, will be a significant development in the recognition of digital assets under English property law.
This long-anticipated reform follows recommendations from the Law Commission’s 2023 digital assets report which investigated and reported on barriers to the legal recognition of digital assets.
The Bill was introduced in the House of Lords on 11 September 2024 and completed its second reading in the House of Commons on 16 July 2025 with no further amendments. The next stage is for it to be considered by a Committee of the whole House; this Committee allows all MPs to take part in the debate and is generally used for Bills of constitutional or ethical importance. A date for the Committee is yet to be announced.
A third category of personal property
Traditionally, personal property falls into one of two categories, either a thing in possession (a tangible item) or a thing in action (a right that can be claimed or enforced through legal action such as a debt or shares). The Bill seeks to create a third category of property for assets which do not comfortably fit into either of the two existing categories.
The Bill, if enacted, will mean that digital assets such as crypto-tokens, cryptocurrencies and non-fungible tokens (NFTs) can be considered personal property under the laws of England and Wales (and Northern Ireland following an amendment by the Special Public Bill Committee on 3 February 2025) and such assets could be afforded the same legal protections as other, traditional, categories of personal property.
The Bill
The Bill itself is very short and comprises of two clauses only, the first clause creates the new category of personal property and the second sets out the Bill’s application. The wording of the first clause, that a thing (including a thing that is digital or electronic in nature) is not prevented from being personal property merely because it does not obviously fit into one of the existing categories of personal property, does not stipulate which ‘things’ will fall into this new category and is deliberately broad to allow the courts to develop this category of personal property through case law. The intention is that this approach will provide the flexibility to respond to evolving circumstances and technological developments whilst also providing legal certainty in relation to personal property rights applicable to digital assets.
Impact
By ensuring that digital assets can be recognised as personal property, the Bill will help provide certainty and protection for people who own and transact with such assets and has the potential to make it easier to defend rights in relation to such assets or recover such assets in the event of theft and misappropriation. However, since the Bill does not clarify which types of digital assets can be considered as personal property, some uncertainty remains which may take time to resolve.
The Bill’s introduction demonstrates the UK Government’s desire to ensure the UK is seen as a global hub for digital finance and technology and sends out a signal to those involved in digital assets that the UK is an attractive location for them to bring their business.
If you have any questions relating to the Bill or digital assets more generally, please contact [email protected].
