Sarah Green, Bristol University
“The Property (Digital Assets etc) Bill has already made significant progress through its Parliamentary journey”
The Property (Digital Assets etc) Bill 2025 aims to ensure that assets in digital form (such as a tokenised securities) can attract the same legal treatment as conventional assets (such as bars of gold). This is essentially an extension of the principle underlying the Electronic Trade Documents Act 2023: that where a thing in digital form has the same legally salient characteristics as those things with which the law has long been familiar, the law should recognise this and treat both the same. Where electronic trade documents were concerned, it was a little easier: the law was already very well established; it just needed to extend its treatment of the paper form to the electronic.
Where digital assets are concerned, the idea is the same but its application is more complicated. Not only is the class of digital assets far broader and more diverse than that of electronic trade documents, but some digital assets are genuinely novel, and have no conventional predecessors with which the law can analogise. This can lead to problems because the law might fail to protect digital assets in the way that parties (legitimately) expect. For example, if someone pays in order to acquire a digital asset, they will probably presume that they will thereby acquire both the digital asset itself and the legal protections that come with ownership. They presume this because, had they bought, say, a car and that car was then driven away by someone else, or damaged, they would expect to be able to make a legal claim for that loss. And their expectations in relation to the car would be met by the law. Where the digital asset is concerned, however, it has not always been clear that the law would recognise the same property rights in such an asset as it does in conventional assets, meaning that the legal protections afforded to property rights will not be available. In other words, if my digital asset is taken from me, I cannot make a claim to recover its value if I have no property right in it.
Clearly, this is not a satisfactory situation, particularly when there is no good reason for such a legal distinction to be made, and for protection of such assets to be limited as a result. Fortunately, the common law (judge-made law resulting from litigation has already started to recognise some proprietary features of digital assets, so there has already been significant progress. The Digital Assets Bill, in its single substantive clause, puts the matter on statutory footing (meaning that courts have to follow suit). It is therefore both confirmatory of the direction in which the law is already going, as well as guaranteeing the law’s future development along the same path.
In practical terms, this means that parties can have confidence in developing and using digital finance solutions, knowing that the products on which they rely will be both recognised and protected by the law. This is essential for economic growth and jurisdictional appeal. Digital commerce is already a mainstream reality in global terms and it is neither a secret nor a surprise that businesses will gravitate towards those systems that best protect their expectations and meet their needs. The Bill is not of course the final piece of the jigsaw, dealing as it does with the private rights of individuals: it is also crucial that regulatory frameworks strike the right balance between user protection and issuer incentives. But a statutory declaration that digital assets can be legally equated with conventional assets is a major signal to the world at large that the UK offers a reflective, pragmatic and progressive regime for business.
The Property (Digital Assets etc) Bill has already made significant progress through its Parliamentary journey and its status can be tracked here: Property (Digital Assets etc) Bill [HL] Stages – Parliamentary Bills – UK Parliament. To be clear, this will be a very welcome legal development, but it is a desirable clarification rather than a substantive requirement: there is no need to wait – the UK is already very ready for Digital Assets.