A Third Category: UK Law Recognises Digital Assets as Property
Red double decker bus passing palace of Westminster London during daytime
On 2nd December 2025 the Property (Digital Assets etc) Act 2025 received Royal Assent, formally confirming that qualifying digital assets can be objects of personal property rights under UK law.
The Act removes uncertainty by stating that a “thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither a thing in possession nor a thing in action,” effectively creating a statutory “third category” of property.
Industry groups and advocates welcomed the change. Bitcoin Policy UK called it a landmark that gives legal protection to holders, while Crypto UK highlighted clearer routes for recovery after theft, inclusion in insolvency and estate processes, and stronger foundations for tokenisation and innovation.
Parliament’s passage of the Act follows Law Commission recommendations and aims to replace inconsistent case‑by‑case rulings with a consistent statutory framework that courts can develop over time.
The Act’s practical effects include improved legal certainty for ownership, recovery, and transfer of crypto‑tokens and NFTs, and clearer treatment in bankruptcy and probate.
Administrators, custodians and platforms will now operate with a firmer legal basis, which could encourage institutional participation and product development in the UK’s digital asset market. However, the Act leaves detailed boundaries and rights to judicial development, meaning litigation and regulatory guidance will still shape how the new category functions in practice.
Key considerations and next steps
Confirm asset classification: Not every digital item will automatically qualify; courts will delineate the scope.
Custody and contracts: Firms should review custody models and contractual terms to align with property treatment.
Estate and insolvency planning: Individuals and advisors should update wills and recovery plans to reflect property status.
Risks and limitations
Statutory recognition does not eliminate all uncertainty: judicial interpretation, cross‑border enforcement, and regulatory regimes (e.g., financial regulation) will continue to affect outcomes. Stakeholders should monitor case law and regulatory guidance as the new framework is tested in disputes.
This article is for informational and educational purposes only and is not financial advice.
UK Space Mission Satellites Failed Launch: An Analogy to Cryptocurrency Adoption
In early 2023, the United Kingdom experienced a setback in its space exploration mission after a rocket carrying the first satellites launched from British soil failed to reach orbit and was lost. Despite meticulous planning and preparation, the launch did not go as planned, and the satellites fell back to Earth. This unfortunate event serves as a reminder that even the most well-planned projects can encounter unexpected obstacles. It also highlights the importance of perseverance and a willingness to learn from failure.
Similarly, the adoption of cryptocurrency and blockchain innovation is still in its initial stages. Just like the UK space mission, the cryptocurrency industry has faced its own setbacks and challenges, including regulatory hurdles, security concerns, and skepticism from traditional financial institutions. However, despite these obstacles, the potential benefits of cryptocurrency and blockchain technology cannot be ignored. From creating a decentralized financial system to facilitating secure and transparent transactions, the potential applications of this technology are vast.
Just as the UK space mission must regroup and continue to pursue its goals, the cryptocurrency industry must continue to innovate and improve its offerings. This will require collaboration between industry leaders, regulatory agencies, and financial institutions to create a sustainable ecosystem that benefits everyone.
One promising development is the growing interest and investment in cryptocurrency from large corporations and institutional investors. This influx of capital and resources can help drive innovation and increase adoption, bringing the industry closer to its goal of global acceptance. It is also worth noting that the initial stages of adoption can be fraught with uncertainty and volatility. The value of cryptocurrencies can fluctuate wildly, and regulatory changes can have a significant impact on the industry. However, as technology matures and becomes more widely adopted, these challenges are likely to become less pronounced.
In the end, the failure of the UK space mission satellites serves as a reminder that setbacks are a natural part of any ambitious endeavor. However, with persistence, innovation, and collaboration, the cryptocurrency industry can overcome its own obstacles and reach its orbit of global adoption. As more individuals and institutions recognize the potential benefits of this technology, we can expect to see continued growth and progress in the years to come.
Digital Assets and Real Estate: Decentralization, Value, and Equity Parallels
One way to think about owning digital assets is like buying a piece of real estate property but at a much lower cost.
The housing market in both the United States and the United Kingdom has experienced significant fluctuations in prices over the past several decades. While owning physical property has traditionally been seen as a smart investment, due to the long-term appreciation of property values, the excessive cost of entry and ongoing expenses associated with property ownership have made it out of reach for many investors.
Digital assets, such as cryptocurrencies and non-fungible tokens (NFTs), have emerged as an alternative investment option for those looking to diversify their portfolios. While their value can be highly volatile, digital assets have shown tremendous growth potential, with some cryptocurrencies experiencing gains of hundreds or even thousands of percentage points in just a few years.
One way to think about owning digital assets is like buying a piece of real estate property but at a much lower cost. In the United States, the average home price is currently around $350,000, according to Zillow. This means that for many people, owning physical property is out of reach unless they take on significant debt or save for many years. In the United Kingdom, the average home price is even higher, with the most recent data from the Office for National Statistics showing an average house price of £256,405.
On the other hand, many digital assets can be purchased for just a few dollars or even cents, making them accessible to a much broader range of investors. While there are ongoing costs associated with owning and maintaining the physical property, such as property taxes, insurance, and repairs, owning digital assets typically requires only a small transaction fee and no ongoing expenses.
It is true that there are risks associated with investing in any asset, including digital assets. Cryptocurrencies are known for their volatility, with prices often fluctuating wildly based on market sentiment and news events. This means that investors in digital assets must be prepared to weather these difficulties and should only invest what they can afford to lose.
Despite these risks, many investors see digital assets as an exciting and potentially lucrative addition to their portfolios. And while the growth potential of digital assets may not be as predictable as the long-term appreciation of the physical property, the lower cost of entry and ongoing expenses make them an attractive option for those looking to diversify their investments.
In conclusion, the historical housing market in both the United States and the United Kingdom has shown that owning physical property can be a smart investment over the long term. However, the excessive cost of entry and ongoing expenses associated with property ownership have made it out of reach for many investors. Digital assets offer similar growth potential at a much lower cost, making them accessible to a broader range of investors. While there are risks associated with investing in any asset, including digital assets, those who are willing to weather the difficulties may find that they offer an exciting and potentially lucrative addition to their portfolios.