Last updated on 21 February 2026
The Property (Digital Assets) Bill is a proposed law in the UK that aims to officially recognise digital assets like cryptocurrencies, NFTs, and tokens as a new type of personal property.
Right now, UK law doesn’t clearly say what kind of property digital assets are. This creates confusion for investors, businesses, lawyers, and even the courts.
The new Bill tries to fix that by creating a clear legal category for digital assets, offering much-needed clarity in a fast-moving area.
Why Is There a Need for the Bill?
In the UK, all property is legally sorted into two main types:
- Things in possession – physical items you can hold, like gold or a car.
- Things in action – legal rights like money in a bank account or shares.
But digital assets don’t neatly fit into either. You can’t touch Bitcoin or “possess” an NFT in a physical sense. And they’re not exactly traditional legal rights either.
This legal gap has made it hard for courts to deal with digital assets properly. For example:
- If someone steals your crypto, can you sue them for theft?
- If you go bankrupt, can your crypto be part of your estate?
- If a company uses crypto in its business, how should that be treated in accounting or tax disputes?
All these questions rely on one thing: whether or not digital assets are “property” under UK law. And right now, that’s a grey area.
What Will the Property (Digital Assets) Bill Do?
The Bill proposes creating a new legal category of property called “data objects”.
This would cover digital assets that exist only in electronic form, like cryptocurrencies, NFTs, and certain types of tokens on distributed ledgers.
Here’s what the Bill aims to do:
- Recognise digital assets as personal property – making them legally valid to own, transfer, or use as collateral.
- Give courts a proper framework – so they can resolve crypto disputes more consistently.
- Protect digital asset owners – by giving them the same legal rights as owners of traditional property.
- Support financial innovation – by giving companies confidence that their use of digital assets won’t cause legal confusion.
In short, the Bill brings digital assets under the law in a clear, structured way.
How Did We Get Here?
This reform didn’t appear out of nowhere. It’s based on years of research and legal thinking.
In 2019, the UK Jurisdiction Taskforce (UKJT) released a legal statement affirming that existing common law recognises digital assets as property.
Then in 2022, the Law Commission released a report recommending that Parliament go further and formally create a third category of personal property for data objects. They also highlighted that:
- UK crypto usage is growing rapidly.
- Billions of pounds in assets are held digitally.
- Courts are already handling crypto disputes but with limited legal tools.
This Bill is Parliament’s way of catching up with the realities of modern finance.
To see why this matters, let’s look at a few examples:
1. Crypto Theft
If someone hacks your wallet and drains your Bitcoin, current UK law may struggle to define this as theft because crypto isn’t clearly property. If the Bill passes, the law will recognise digital assets as property, allowing you to seek justice more clearly.
2. Bankruptcy and Inheritance
Imagine a business owner passes away, leaving behind £500,000 worth of crypto. Right now, the executor of the estate may face legal uncertainty when distributing those assets. With the new Bill, the law will treat digital assets as part of the deceased’s property and allow people to handle them like any other asset.
3. Using Crypto as Security
Startups often want to raise money using crypto as security (collateral). Banks and lenders are hesitant because it’s not clear how secure those rights are under law. This Bill will offer a legal foundation for those kinds of financial structures.
How Will This Affect Businesses and Investors?
For businesses, the Bill offers legal certainty. It helps startups, exchanges, and crypto service providers know exactly where they stand. This is crucial for:
- Risk management
- Fundraising
- Contracts
For individual investors, it means better protection. Your crypto won’t be in a legal grey zone anymore, it will be property, just like cash or jewellery.
Is This Good News for the UK Crypto Sector?
Absolutely. One of the biggest challenges in crypto is the lack of legal clarity. This holds back innovation, causes unnecessary risk, and deters institutional involvement.
By taking the lead in legally recognising digital assets, the UK is positioning itself as a forward-thinking financial centre.
It also aligns with the UK’s broader vision to be a global crypto hub, announced by the government in 2022.
Are There Any Risks or Criticisms?
Some say the Bill could unintentionally legitimise risky or speculative digital assets. But that’s not the point of the law.
The Bill is about ownership and property rights, not regulation of crypto products or their financial risks. It doesn’t say whether crypto is good or bad. It just says: if you own it, you deserve the same legal protection as you would with other property.
Of course, this is just one piece of the puzzle. The UK still needs clear rules on:
- Crypto taxation
- Anti-money laundering
- Consumer protections
- Stablecoins and DeFi platforms
But the Property (Digital Assets) Bill is a solid step in the right direction.
Final Thoughts
The Property (Digital Assets) Bill may seem like a technical update to old legal rules. But it has real-world impact for everyone involved in crypto, whether you’re a casual investor, a business owner, or a legal professional.
It answers a simple but powerful question: Can digital assets be legally owned like other property? The answer, finally, is yes.
Are you holding digital assets or building a business in Web3?
At Crypto Accountants, we help individuals and companies stay compliant, reduce tax risk, and understand regulatory change with confidence.
Let us help you prepare for the next era of crypto law.
People Also Ask
What exactly is a “data object”?
A data object is something that exists only in digital form but can be owned and transferred. This includes cryptocurrencies, NFTs, and some types of tokens.
Will this change how my crypto is taxed?
No. Taxation is handled by HMRC. This Bill only affects how digital assets are treated in terms of property rights, not tax rules.
Is this law already in effect?
As of May 2025, it is still a proposed law. It needs to go through Parliament before becoming official.
Will smart contracts also be covered?
Smart contracts may be indirectly affected since they often involve digital assets. But they are not the main focus of this Bill.
