United Kingdom legislation now formally recognises digital assets such as cryptocurrencies and stablecoins as personal property, offering holders protections under established property law. The Property Act 2025 - previously a bill - received royal assent, confirming that digital tokens may be treated as a third category of personal property alongside traditional“things in possession” and“things in action.” This marks a decisive shift from earlier reliance on case-by-case rulings by courts.

Legal recognition ensures that crypto-owners gain enforceable rights in instances of theft, fraud or insolvency, and enables digital assets to be included in estates or bankruptcy proceedings under the same protections afforded to conventional property. The Act does not itself define which digital assets qualify - courts will decide those details over time.

Judicial developments had already begun to lay the groundwork for this change. As early as 2019, the UK Jurisdiction Taskforce concluded that crypto-assets met criteria for property under English law: they could be defined, identified, transferred and treated as assets capable of value retention. A key case, AA v Persons Unknown, saw the High Court of England and Wales recognise Bitcoin provided as ransom in a cyber-attack as property, granting the insurer a proprietary injunction.

Advocates of the law hailed it as providing clarity long sought by individuals and businesses holding crypto-assets. CryptoUK, a leading trade body for digital assets, noted that while courts had already treated crypto as property in some cases, codifying the principle into statute removes uncertainty and streamlines legal protections across theft, insolvency and estate-related scenarios.

Legal experts say the Act reflects the recommendations laid out by the Law Commission in a 2023 report, which urged reform to ensure the law could accommodate emerging digital assets under a flexible yet robust framework. The Commission argued that existing categories of personal property under law were too rigid to account for assets that lacked physical form or contractual rights.

This statutory change arrives as UK regulators concurrently refine the broader regime for crypto-assets. Draft legislation published earlier this year already seeks to amend the Financial Services and Markets Act 2000 to designate certain“qualifying cryptoassets” and“qualifying stablecoins” as regulated investments, bringing market-level rules for trading, custody and compliance under formal oversight.

While the law does not render cryptocurrency a legal tender - meaning it still cannot be used to settle debts in substitute for currency - its classification as property gives holders legal certainty over ownership and enforceable rights. Taxation and regulatory treatment will continue to follow established frameworks, though this legal milestone reduces ambiguity over the status of crypto-assets in private law contexts.

Judges, lawyers and market participants anticipate that the Act will lead to a more stable and predictable legal environment for crypto-asset ownership, enabling individuals and institutions to treat tokens with the same legal respect accorded to traditional assets. As the courts start applying the new law in real cases, the boundaries of which digital assets qualify will grow clearer - and the UK's position as a regulatory pioneer in digital asset law will be reaffirmed.

Arabian Post – Crypto News Network

Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.

MENAFN04122025000152002308ID1110434953