UK Recognizes Crypto as Legal Property in Landmark 2025 Act

The passage of the Property (Digital Assets etc.) Act 2025 marks one of the most significant legal changes to how the UK treats digital assets. The bill moved through both the House of Lords and House of Commons without amendment, receiving Royal Assent on Tuesday. While UK courts had already been treating digital assets as property through case-by-case rulings, the new law elevates that principle into statute. This codification provides digital holdings with a much firmer legal footing, a development hailed by industry advocates as transformative.

Susie Ward, CEO of Bitcoin Policy UK, stated, “A third category of property now exists and it finally gives legal protection to the sats you hold.” Her colleague, Chief Policy Officer Freddie New, described the reform as potentially “the biggest change in English property law” since medieval times, adding that the act becoming law is “a massive step forward for Bitcoin in the United Kingdom and for everyone who holds and uses it here.” The industry association CryptoUK emphasized that Parliament writing this principle into law provides much clearer legal standing for proving ownership, recovering stolen assets, and handling digital assets in insolvency or estate cases.

The new legal framework stems directly from a 2023 recommendation by the Law Commission, the independent body responsible for reviewing and modernising UK law. The commission identified a fundamental problem: digital assets like Bitcoin and stablecoins do not fit neatly into traditional property classifications. UK law has historically distinguished between a “thing in possession”—a physical object one can hold—and a “thing in action,” such as a contractual right. Digital assets often share characteristics of both while fitting fully into neither category, creating legal uncertainty.

The Property (Digital Assets etc.) Act 2025 resolves this by explicitly confirming that “a thing that is digital or electronic in nature” can still be the subject of personal property rights. This creates the necessary legal bridge, acknowledging the unique, intangible nature of crypto assets while granting them the robust protections associated with personal property. This clarity is expected to reduce legal friction and foster greater confidence among users, investors, and financial institutions operating in the digital asset space.

This landmark property law shift does not occur in isolation. It aligns with parallel efforts by UK financial authorities to develop comprehensive oversight for the digital asset ecosystem. The Bank of England is advancing its own work on digital money oversight, having recently opened a consultation on regulating sterling-denominated stablecoins—a move it called “a significant step” toward preparing for their broader use in payments. As per media reports, Deputy Governor Sarah Breeden indicated that the UK aims to implement stablecoin rules “just as quickly as the United States,” signaling a coordinated push for regulatory clarity.

The development is poised to set a significant international precedent. By being one of the first major economies to statutorily recognize digital assets as property, the UK provides a concrete legal model for other nations grappling with similar classification issues. This could influence the evolution of crypto regulatory frameworks across the world, promoting a more standardized approach to ownership rights, asset recovery, and integration into legacy financial and legal systems like insolvency proceedings. The Act represents a foundational step in legitimizing the asset class and integrating it into the formal economy.