Digital assets bill becomes law in England and Wales

Thursday, 04 December 2025

The Property (Digital Assets etc) Act 2025 (the Act) received royal assent on 2 December 2025.

The legislation closely follows recommendations made by the Law Commission for England and Wales (the Law Commission) in 2023. These recommendations aimed to make clear that digital assets such as crypto-tokens and non-fungible tokens can be the object of personal property rights, even though they do not fit into either of the traditional two property categories. These categories are ‘things in possession’ that are physical property and ‘things in action’ that have to be claimed through litigation.

The Law Commission’s report had concluded that digital assets, though property, were fundamentally different both from physical assets and from rights-based assets such as debts and financial securities. It said a third category of property was therefore needed.

The new Act codifies this position, removing the uncertainty that remains in the absence of a definitive statement from an upper court.

‘[The Act] 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’, the Law Commission says. ’This will enhance the rights of users of crypto-tokens and improve legal certainty for individuals and businesses.’

However, the Act does not attempt to enumerate exactly what assets are members of this third category. Instead, it leaves it to the courts to develop case law delineating the boundaries and rights that attach to ‘third category’ assets, of which new types are continually emerging as the technology develops.

Digital assets are more diverse than simply being crypto and decentralised digital currencies, says law firm Russell Cooke. ‘They are better defined and thought of as digital representations of rights, obligations, liabilities and value created, stored, transferred and transacted digitally.’

‘It is often uncomfortable to have significant residual uncertainty around how new commercial products and services will be treated’, the firm notes. ‘Digital assets are going to continue to be a growing issue and their presence in our national economy as well as on the international economic stage means there is growing pressure to address regulatory and legal issues’.

The Act has not delivered certainty in terms of property rights generally. Its impact will be dependent on future litigation and judicial interpretation. ‘The flexibility and broad drafting of the provision does leave residual uncertainty for the judiciary and various regulatory bodies to deal with’, Russell Cooke says.

Other related matters considered by the Law Commission, including collateral arrangements for crypto-tokens, are still under consideration by the UK government.