The UK has officially taken a "massive step forward" in the realm of digital assets by enacting the Property (Digital Assets etc.) Bill, which legally recognizes cryptocurrencies and stablecoins as property. This landmark decision aims to provide greater clarity and protection for crypto users and businesses operating within the UK.

Announced in the House of Lords by Lord Speaker John McFall, the bill received royal assent, transforming it into an Act of Parliament. The legislation addresses ambiguities in existing laws, particularly concerning the status of digital assets as personal property. Previously, UK common law, based on judicial decisions, recognized digital assets as property. The new law solidifies this principle, providing digital assets with a clearer legal foundation, particularly in matters such as proving ownership, recovering stolen assets, and managing them in insolvency or estate cases.

Freddie New, policy chief at Bitcoin Policy UK, hailed the enactment as a "major advancement" for Bitcoin and its users in the UK. CryptoUK, an advocacy group, emphasized that the bill confirms digital or electronic 'things' can be objects of personal property rights. UK law traditionally categorizes personal property into two types: 'things in possession,' which are tangible items like cars, and 'things in action,' which are intangible rights such as contract enforcement. The bill clarifies that digital or electronic items are not excluded from personal property rights simply because they do not fit neatly into these categories.

The Law Commission's 2024 report argued that digital assets could possess both qualities, and their ambiguous status in property rights laws could hinder dispute resolution and create uncertainty. By recognizing digital assets as property, the UK is aligning itself with other jurisdictions that are developing comprehensive cryptoasset regulatory frameworks.

This move is expected to have several positive implications:

• Enhanced legal protection: Owners of digital assets will have stronger legal recourse in cases of fraud, theft, or disputes. Freezing injunctions and other legal tools will be available to protect digital assets.
• Clarity for businesses: The legislation provides a clearer framework for businesses operating in the crypto space, reducing regulatory uncertainty and encouraging investment.
• Inclusion in insolvency proceedings: Digital assets can now be included in bankruptcy and insolvency procedures, ensuring that they can be used to repay creditors.
• Tax Scrutiny: Starting January 1, 2026, crypto traders must provide personal details to exchanges, as part of the Cryptoasset Reporting Framework (CAFR). Exchanges must provide HM Revenue & Customs (HMRC) with customer information, including cryptocurrency transactions and tax reference numbers. Traders who fail to supply required details could face fines of up to £300, while platforms may be fined the same amount per unreported customer.

Looking ahead, the UK government is committed to establishing a comprehensive regulatory framework for cryptoassets. The Financial Conduct Authority (FCA) is actively working on new rules for stablecoin issuance, custody, and prudential standards. They have also lifted the retail ban on crypto exchange-traded notes from October 2025. These measures aim to strike a balance between fostering innovation and ensuring consumer protection. The UK is also aligning with international standards, such as the OECD's Crypto-Asset Reporting Framework (CARF), to improve compliance with tax rules.

While the recent change in government created some uncertainty regarding the future of crypto regulation, the City Tokenisation Summit signaled a shift in strategy, suggesting that future regulation could take a different shape than that proposed by the previous government. Overall, the UK is striving to become a global hub for cryptoasset technology, with a regulatory environment that promotes innovation while maintaining high standards of financial stability and consumer protection.