UK Recognises Crypto and Digital Assets as Legal Property Under New 2025 Act

The United Kingdom has taken a historic leap into the future of digital finance after King Charles III granted Royal Assent to the Property Act (Digital Assets etc.) 2025 on Tuesday. The new law officially recognises cryptocurrencies and other digital assets as personal property, marking one of the most significant legal reforms in the global crypto landscape.

A New Legal Category for Digital Assets

The Act enshrines into law a key recommendation by the Law Commission of England and Wales, which argued that digital-only assets require their own category of personal property. Previously, crypto assets such as bitcoin and NFTs sat in a legal grey zone — neither classified as physical items (“things in possession”) nor as enforceable rights (“things in action”).

The new law creates a third category of personal property, granting digital assets a clear legal identity for the first time.

Stronger Protection for Crypto Owners

By giving digital assets full property status, the Act immediately strengthens the rights of crypto holders. The reform ensures that:

• Crypto wallets and tokens receive legal protection equivalent to physical property
• Courts can freeze, seize, or recover digital assets during investigations or disputes
• Digital holdings can be included in estates, bankruptcy cases, and divorce settlements
• Victims of theft or fraud gain clearer pathways to judicial remedy

Legal experts have described the Act as a “coming-of-age moment” for crypto in the UK.

Boosting Innovation and Investor Confidence

The legislation complements ongoing regulatory work on stablecoins, crypto custody, and broader digital asset frameworks. Together, these reforms align with the UK government’s ambition to establish the nation as a leading global hub for blockchain, fintech, and digital innovation.

Institutional investors and industry participants are expected to benefit from increased regulatory certainty, enabling them to scale operations and develop new products more confidently.

Flexible Framework for a Rapidly Evolving Sector

Importantly, the Act avoids narrowly defining which digital tokens qualify as property. Instead, it leaves room for courts and future case law to make determinations as technology evolves. This flexibility is designed to prevent the need for constant legislative updates.

Still, some uncertainties remain, especially regarding how the law will apply to:

• Complex decentralised protocols
• Smart contracts
• Tokenised real-world assets

These areas will likely be clarified through future rulings.

A Landmark Shift for Global Crypto Regulation

The Act brings the UK in line with, and in some cases ahead of, major jurisdictions still grappling with fragmented interpretations of digital assets. For the first time, holders of cryptocurrencies in the UK can rely on consistent, unified legal protection across the board.

By granting digital assets full property rights, the UK signals its commitment to embracing the digital economy and shaping the future of global crypto regulation.