UK Law Now Recognises Bitcoin and Digital Assets as Personal Property Giving Legal Protection to Investors

UK Recognises Bitcoin and Digital Assets as Full-Fledged Property

The United Kingdom has officially brought cryptocurrencies and digital assets under the same legal protections as traditional property, ending years of uncertainty over their status.

The Property (Digital Assets etc) Act 2025 received royal assent from King Charles III this week, following an announcement by Lord Speaker John McFall in the House of Lords.

The legislation confirms that holdings such as bitcoin and stablecoins can be recognised as personal property under UK law.

Why Digital Assets Needed Legal Clarity

Until now, UK courts treated digital assets as property on a case-by-case basis, creating inconsistent outcomes.

Personal property under British law traditionally falls into two categories: “things in possession,” like cars or furniture, and “things in action,” such as contractual rights or debts.

Cryptocurrencies, with their intangible yet transferable nature, did not fit neatly into either group, leaving ownership and recovery disputes unresolved.

The Law Commission of England and Wales recommended in 2024 that cryptocurrencies be formally recognised as a distinct category of personal property.

The new legislation enshrines this guidance, allowing “a thing of a digital or electronic nature” to be treated as property, even if it does not conform to traditional definitions.

Industry Groups Welcome Legal Certainty

Industry associations have hailed the move as a major milestone.

Susie Ward, CEO of Bitcoin Policy UK, said,

“A third category of property now exists and it finally gives legal protection to the sats you hold.”

Freddie New, the group’s Chief Policy Officer, described the law as “possibly the biggest change in English property law since the Middle Ages.”

CryptoUK, the country’s primary crypto and blockchain industry trade association, noted that codifying these protections provides clearer legal pathways for dealing with stolen assets, inheritance issues, and insolvency cases.

The association stated on X,

“This gives digital assets a much clearer legal footing — especially for things like proving ownership, recovering stolen assets, and handling them in insolvency or estate cases.”

How the Law Affects Ownership and Inheritance

With the Act in place, digital assets can now be included in wills and estate planning, allowing heirs to inherit cryptocurrency without legal ambiguity.

Courts will have a statutory basis to resolve disputes over ownership, making recovery after theft or fraud more straightforward.

Data from the UK’s financial regulator shows that around 12% of British adults currently hold cryptocurrency, up from 10% in previous surveys.

The law aims to provide protections for this growing number of holders while supporting broader development in digital finance.

UK Aims to Lead in Digital Finance Regulation

The legislation forms part of a wider government effort to establish the UK as a hub for digital finance.

Earlier this year, the Bank of England launched a consultation on a regulatory framework for sterling-denominated stablecoins, highlighting the government’s intention to bring crypto businesses under rules similar to traditional financial institutions.

Deputy Governor Sarah Breeden told Bloomberg that the UK intends to match the US in operationalising stablecoin regulations, signalling an ambition to build secure and regulated digital markets.

At the same time, the government is reviewing a proposed ban on cryptocurrency donations to political parties, following Reform UK’s acceptance of digital assets under Nigel Farage’s leadership.

Legal Recognition Offers Security for Crypto Holders

By formalising the status of digital assets, UK law now gives investors the same rights as holders of traditional property.

Courts can adjudicate disputes more efficiently, assets can be included in corporate and personal bankruptcy proceedings, and ownership claims are easier to prove.

Industry experts believe this legal clarity will boost confidence in digital markets, supporting growth in both investment and real-world asset tokenisation.

This historic reform finally moves cryptocurrency out of a legal grey area, providing clarity for investors, businesses, and regulators alike.