While major global economies are still debating how to regulate cryptocurrencies, the UK has quietly made a crucial institutional move.
On December 3rd local time, John McFaul, Speaker of the House of Lords, officially announced that the Property (Digital Assets, etc.) Bill had been approved. This means that, with the approval of King Charles, the bill has officially become law. From now on, under the legal framework of England and Wales, digital assets such as cryptocurrencies and stablecoins are clearly recognized as property.
A pivotal leap from "case law recognition" to "codification"
This legislation is not a creation out of thin air, but rather a confirmation and enhancement of existing judicial practice. Previously, English case law had established the principle that digital assets are property through multiple judicial decisions. However, this recognition based on accumulated cases has always lacked the clarity and stability of codified law.
The core of this bill is to codify the recommendations made by the UK Law Commission in its 2024 report: to classify crypto assets as a new and distinct form of movable property for clarity.
CryptoUK, a UK-based crypto advocacy group, commented: "British courts have already recognized digital assets as property, but this was entirely achieved through case-by-case judgments. Parliament has now enshrined this principle in law." This marks a shift in the legal status of digital assets from "case-by-case recognition" by the judiciary to "universal establishment" by the legislature.
"Digital objects" as legal objects: Solving the property rights dilemma
The most significant legal breakthrough of this bill is that it explicitly recognizes that "digital or electronic 'things' can be the object of movable property rights."
In traditional British property law, movable property is divided into two categories: "possessive property" (such as tangible items like cars and watches) and "objects of litigation" (such as intangible items like contractual rights and intellectual property rights). Digital assets, due to their unique virtual, replicable yet exclusively controllable characteristics, are difficult to categorize completely and have long existed in a legal gray area.
The new bill explicitly states that "things of a digital or electronic nature" will not be excluded from the scope of movable property rights simply because they are neither "possessed" nor "the subject of a lawsuit." This provides a legal foothold specifically for digital assets, resolving the fundamental problem of their ownership.
What does a clear legal foundation mean?
The clarification of its legal status brings a series of specific protections and possibilities. Advocates have pointed out that this move provides consumers and investors with "greater clarity and protection."
- Proof of Ownership and Recourse: Digital assets can be clearly identified as belonging to the owner. In the event of theft or fraud, victims have a solid legal basis to reclaim their assets.
- Bankruptcy and Estate Handling: In personal bankruptcy or estate inheritance cases, digital assets will be formally included in the scope of asset liquidation and distribution, and the rights and interests of holders will be protected.
- The cornerstone of business innovation: CryptoUK emphasizes that the UK now has a clear legal basis for crypto ownership and transfer, which will be "more conducive to supporting the development of new financial products, tokenized real-world assets (RWAs) and a more secure digital market."
In response to the bill's enactment, Freddie New, head of a UK Bitcoin policy organization, stated on social media: "This is a significant milestone in the development of Bitcoin in the UK and a major breakthrough for all users who hold and use Bitcoin in the UK."
The UK Piece in the Global Regulatory Puzzle
This legislation by the UK is a continuation of its strategy to establish itself as a "global crypto hub." In April, the UK government announced plans to bring crypto companies under a similar regulatory framework as other financial companies, aiming to strengthen consumer protection while encouraging innovation.
The passage of this property rights law resonates with global regulatory trends. Whether it's the EU unifying market rules with the MiCA framework, the US providing a federal regulatory path for stablecoins through the GENIUS Act, or Singapore establishing a prototype for on-chain clearing through the "Guardians Program," countries are vying for the right to set rules in the digital finance era.
The UK's approach is unique: instead of rushing into comprehensive business regulation, it started with the most fundamental property rights laws, laying a solid foundation for the long-term development of the entire industry. This "establish rights first, then develop" approach provides stable legal expectations for subsequent regulation and innovation.
Conclusion
The enactment of the Property (Digital Assets, etc.) Act marks another milestone in the transition of digital assets from a "technical phenomenon" to a "legal system."
This is not just about crypto holders in the UK; it sends a clear signal to the global market: when mainstream jurisdictions begin to formally recognize the property value of digital assets in the form of written law, the process of the entire asset class integrating into the mainstream financial system is irreversible.
The competition among regulators in the global encryption landscape is moving beyond licensing and tax policies, delving into the most fundamental foundations of civil and commercial law. The UK's move is solid and far-reaching.
