The United Kingdom (UK) has taken a landmark step in cryptocurrency regulation by officially recognizing digital assets as personal property under the Property (Digital Assets etc) Act 2025, which received Royal Assent this week.
The legislation establishes a clear statutory framework for digital ownership after years of fragmented court rulings and marks one of the most significant legal developments for the country’s crypto sector to date.
New Legal Category for Digital Assets
For more than a century, UK property law has been built around a two-part system established in an 1885 court ruling. Under that approach, physical items like cars and homes were classified as “things in possession,” while rights tied to contracts or debts were treated as “things in action.”
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Digital assets never fit either definition, creating a grey area that left courts and millions of crypto users without a straightforward way to determine who legally owns what or how lost assets can be recovered.
The new law closes that gap by explicitly recognizing digital assets as personal property. In simple terms, the Act states that a digital item is not excluded from property protections simply because it differs from traditional property types.
The change affects a substantial share of the population: around seven million people in the UK, roughly 12% of adults, now hold some form of cryptocurrency, according to the Financial Conduct Authority (FCA).
What Changes for UK Crypto Holders
The law delivers practical benefits for crypto holders. It provides a clearer path to prove ownership in court and strengthens the ability to recover stolen digital assets, replacing the previous system that relied on uncertain judicial interpretation.
It also clarifies how crypto should be treated in bankruptcies, divorces, and estate planning, allowing executors to manage digital assets in wills and enabling insolvency practitioners to include crypto when settling debts.
Building a Digital-Asset Hub
The Property (Digital Assets etc) Act 2025 is part of a broader strategy to position the UK as a global cryptocurrency hub.
The government is working with the United States on joint cryptocurrency policies, while the Financial Conduct Authority (FCA) is finalizing rules for stablecoins, trading platforms, and custody services, set to take effect in 2026.
Why This Matters
By passing the Property (Digital Assets etc) Act 2025, the UK reduces uncertainty for holders, courts, and businesses, paving the way for wider adoption, stronger investor confidence, and greater institutional participation in the crypto market.
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People Also Ask:
It means cryptocurrencies and certain digital tokens are legally treated as personal property, giving holders clear rights to ownership, transfer, inheritance, and recovery in court.
Approximately seven million people in the UK — around 12% of adults — hold some form of cryptocurrency, according to the Financial Conduct Authority.
Not necessarily. Courts will determine on a case-by-case basis whether specific digital assets qualify under the new legal category.
The law is part of a wider effort to position the UK as a global crypto hub, including international coordination with the U.S. and FCA rules for stablecoins, trading platforms, and custody services.
