United Kingdom Passes Law That Recognizes Digital Assets As Property, Opens The Door For Broad Tokenization
"The UK is now better positioned to support the growth of new financial products, tokenised real-world assets, and more secure digital markets."
The following report is a press release from the United Kingdom Law Commission, published on December 3rd.
The Property (Digital Assets etc) Act 2025, based closely on Law Commission recommendations concerning the law of personal property and its application to digital assets, has completed its passage through Parliament and received Royal Assent on 2 December 2025. Further details and a full version of the Act are available on the Parliamentary Bills website.
Property and property rights are vital to modern social, economic and legal systems and the law provides important protections for property owners. In a report published in June 2023, the Commission concluded that certain digital assets, including crypto-tokens and non-fungible tokens (NFTs), can be regarded as “property” and should be recognised and protected as such.
However, the Commission said that such digital assets are fundamentally different both from physical assets, and from rights-based assets like debts and financial securities. This means that they do not fit easily within the categories of personal property traditionally recognised by the law in this jurisdiction: things in possession and things in action. The Commission recommended that legislation should confirm the existence of a “third” category of personal property, into which crypto-tokens and potentially other assets could fall. The Commission published a draft bill to implement this recommendation in July 2024.
The Property (Digital Assets etc) Act 2025, based closely on that draft bill, makes clear that a thing is not prevented from being the object of personal property rights merely because it does not fit into either of the existing categories. This reflects the trajectory of recent case law, but removes the lingering uncertainty that remains in the absence of a definitive statement from an upper court.
The Act leaves it to the courts to develop this “third category” of personal property by delineating its boundaries and the rights that attach to “third category” things.
Professor Solène Rowan, Commissioner for Commercial and Common Law, stated:
The passage of the Property (Digital Assets etc) Act 2025 keeps the law of England and Wales at the forefront of legal development. This new Act, which is based on our recommendations, 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. This will enhance the rights of users of crypto-tokens and improve legal certainty for individuals and businesses.
The Commission’s recommendations on other matters including collateral arrangements for crypto-tokens are still under consideration.
AUTHOR COMMENTARY
This bill is a big step for the United Kingdom to adopt tokenization of all assets on a much wider commercial scale. Linked in the press release, the British LawCom has a page on digital assets and the commission recommendations in consideration before this latest Parliamentary bill was adopted. Part of the article reads:
We also make recommendations to provide market participants with legal tools that do not yet exist in England and Wales, such as new ways to take security over crypto-tokens and tokenised securities. We recommend this work is undertaken by a multi-disciplinary project team.
Our recommendations for reform and common law development aim to create a clear and consistent framework for digital assets that will provide greater clarity and security to users and market participants. Our recommendations also support the Government’s goal of attracting technological development to cement the position of England and Wales as a global financial hub for crypto-tokens and cryptoassets.
Wrapped up in crypto regulations that the average citizen doesn’t know or care about, this bill helps open the door for broader tokenization, something the Bank of England has lauded now for years, as I have discussed before.
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Very interesting update. The Scottish Law Commission is also embarking on a similar “tertium quid” approach.
It is part of WEF "you will own nothing and ..." Once everything a "property" then it is taxed. If it's taxed, its owner is known, if the owner is known, it can not be hidden in a cold wallet. In essence, the government will incrementally tax what a person owns (probably in exchange for "social safety net", 'welfare'"). It's a pipe dream because regardless of how docile the citizens have become, there will be a pushback. One only can hope.