The UK Makes History: Law Officially Recognizes Cryptocurrency as Personal Property, Ushering in a New Era for Digital Assets

On December 2, 2025, King Charles III of the United Kingdom formally approved the Property (Digital Assets, etc.) Act 2025, which immediately came into effect in England, Wales, and Northern Ireland. This move created an unprecedented “third category” of personal property in UK property law, specifically established for digital assets such as cryptocurrencies like Bitcoin, Ethereum, as well as NFTs.

This means that around 7 million UK cryptocurrency holders (about 12% of the adult population) can now clearly own, inherit, and recover stolen digital assets.

01 Legal Milestone: A Digital Revolution in a Century-Old Property Law System

The UK property law framework, established by a court ruling in 1885, has always divided personal property into two main categories: tangible chattels (such as cars, houses) and choses in action (such as contractual rights and debts).

With the emergence of digital assets, this traditional binary system has shown obvious limitations. Cryptocurrencies are neither “things” that can be physically possessed nor “rights” that can be claimed through lawsuits—they simply do not fit neatly into the existing classification.

To address this issue, after years of research, the UK Law Commission issued a report in June 2023 recommending that cryptocurrencies, NFTs, and other digital assets be treated as “property” and given corresponding protection.

The core breakthrough of the Act is its clear statement: “Anything (including digital or electronic things) is not prevented from being the subject of personal property rights simply because it does not fit into a traditional type of property.”

This simple yet revolutionary legal formulation removes the fundamental barrier for recognizing digital assets as property.

02 The Third Category: Legal Status of Digital Assets

The new Act does not create an entirely new legal concept out of thin air, but rather formalizes recent UK court practices. In fact, since 2019, UK courts have ruled in several cases that cryptocurrencies like Bitcoin can be considered property.

For example, in “AA v Persons Unknown [2019] EWHC 3556 (Comm)”, the court held that despite being intangible and decentralized, and not falling under things in possession or choses in action, Bitcoin can still be regarded as property.

However, this case-by-case approach resulted in a lack of legal certainty, with each case requiring judges to make complex interpretations of ambiguous property law—leading to inconsistent precedents.

The Property (Digital Assets, etc.) Act 2025 resolves this uncertainty by providing clear guiding principles for courts.

While the Act confirms that digital assets can constitute a “third category of property,” it does not strictly define specific types of digital assets. Instead, it adopts a technology-neutral approach, allowing courts to determine property status based on the actual characteristics of each asset.

This flexibility enables the legal framework to adapt to the rapid development of blockchain technology and the continuous emergence of new types of digital assets.

03 Practical Impact: Protecting the Rights of Cryptocurrency Holders

For the UK’s 7 million cryptocurrency holders, this legal change brings tangible protection of rights. According to the Financial Conduct Authority, this figure represents about 12% of the UK’s adult population and has tripled since 2021.

The key change is the clarification of how these assets are handled. Cryptocurrencies can now be regarded as inheritable property in wills, and executors must include them in the estate.

In bankruptcy, practitioners must treat digital assets as part of the debtor’s property, and crypto assets must also be considered in divorce property divisions.

CryptoUK, the UK’s leading crypto industry association, welcomed the change, stating that it “provides greater transparency and protection for consumers and investors.”

The association pointed out that digital assets can now have “clear ownership, can be recovered in cases of theft or fraud, and are included in bankruptcy and estate management.”

When digital assets are stolen or subject to fraud, owners can now more easily prove ownership and recover assets through the court system.

Previously, such cases depended solely on a judge’s interpretation of ambiguous property law.

04 Market Response: Dual Opportunities for Traditional Finance and Crypto

The increased legal certainty injects new vitality into the UK digital asset ecosystem. Industry group Bitcoin Policy UK even described the Act as “the biggest change in English property law since the Middle Ages.”

Even before the Act’s passage, the UK had begun adjusting its digital asset policies. For example, earlier this year the UK lifted a four-year retail ban on trading Bitcoin and crypto Exchange Traded Notes (ETNs).

This policy shift allowed major financial institutions like BlackRock to launch products such as the iShares Bitcoin ETP (IB1T) on the London Stock Exchange.

Take Gate as an example: as a leading global digital asset platform, its users in the UK can now manage their assets with greater confidence, without worrying about potential risks due to unclear legal status.

Investors can easily check the latest market trends—for example, as of December 2, 2025, Bitcoin price dynamics indicate greater liquidity and increased institutional participation.

At the same time, the UK is coordinating with other regulatory areas. In January 2025, the Treasury clarified that eligible crypto asset staking would not be considered a collective investment scheme, providing a clearer legal framework for staking services.

05 Global Competition: The UK’s Strategic Position in Digital Finance

This move comes as countries worldwide compete to attract crypto businesses and investment. The UK government has been committed to positioning the country as a global leader in digital finance, while maintaining strong consumer protection.

This property law reform is part of a broader regulatory strategy. The UK recently announced a joint task force with the United States to jointly formulate cryptocurrency policy, demonstrating international coordination in digital asset regulation.

In specific regulatory measures, the UK Financial Conduct Authority is developing comprehensive rules for stablecoins, trading platforms, and custodial services, expected to be fully implemented by 2026.

These efforts aim to create a holistic regulatory framework that supports innovation while protecting consumers.

The UK Treasury has released draft legislation to bring crypto exchanges, dealers, and agents under regulatory supervision.

Chancellor Rachel Reeves stated: “Strong rules around cryptocurrencies will boost investor confidence, support fintech development, and protect people across the UK.”

06 Looking Ahead: The Pathway to Integration of Digital Assets and Mainstream Finance

With the passage of the Property (Digital Assets, etc.) Act 2025, the UK has laid a solid legal foundation for the widespread adoption of digital assets. Increased legal certainty may accelerate the mainstreaming of crypto services.

Traditional financial institutions such as banks, investment firms, and insurance companies can now more confidently launch cryptocurrency-related products and services. With property rights clearly established, digital assets are poised to become more widely integrated into the UK’s financial system.

Looking forward, the next step in UK digital asset regulation may be to improve supporting measures. The Law Commission’s recommendations on crypto collateral arrangements are still under consideration.

At the same time, the Financial Conduct Authority is also developing comprehensive rules for stablecoins, trading platforms, and custodial services, expected to be fully implemented by 2026.

For global crypto exchanges, the UK’s legal change means new opportunities. Take Gate as an example: as a leading global digital asset platform, its UK users can now trade and allocate assets with greater peace of mind.

Outlook

Standing atop the skyscrapers of the City of London, gazing at the interplay of ancient buildings and emerging tech parks on both banks of the Thames, change arrives quietly.

The nation that once defined global trade rules with wool and steam engines today, with a single succinct line of legislation, raises a bold flag in the legal wilderness of the digital world.