Historic Legislation in the UK! Cryptocurrency Officially Classified as Property, Benefiting 12% of the Population

The UK has passed a bill that classifies cryptocurrencies and stablecoins as property, with supporters saying this will better protect crypto users. On Tuesday, House of Lords Speaker John McFall told the chamber that the “Digital Assets and Other Property Bill” had received royal assent, meaning King Charles has officially approved the legislation. According to the Financial Conduct Authority, about 12% of UK adults own cryptocurrency, and this property law will provide clearer legal protection for millions of users.

King Charles Grants Royal Assent to Classify Crypto as Property

(Source: UK Parliament Live Broadcast)

UK common law, based on judges’ rulings, had already established that digital assets are considered property. However, this bill seeks to codify the recommendations made by the Law Commission of England and Wales in 2024, which called for cryptocurrencies to be explicitly classified as a new form of personal property. Advocacy group CryptoUK said, “UK courts have previously treated digital assets as property, but this was achieved through case-by-case judgments. Now, Parliament has written this principle into law.”

The shift from case law to statute is significant. In common law systems, judges’ rulings can set precedents, but each case still requires re-argument and interpretation. Codifying this principle in statute means there is no longer a need to debate whether crypto is property in every case, providing a clear starting point for all related legal proceedings.

“This gives digital assets a much clearer legal footing—especially for proving ownership, recovering stolen assets, and handling these assets in bankruptcy or inheritance cases,” CryptoUK added. These three use cases are the most pressing concerns for crypto users. In the past, when crypto was stolen or a holder died, legal proceedings often stalled because it was unclear how these assets should be handled under the law.

The UK has chosen to address this issue through dedicated legislation rather than waiting for case law to slowly accumulate, demonstrating the government’s proactive stance toward the crypto industry. Data from the Financial Conduct Authority shows that about 12% of UK adults own crypto, up from 10% in previous surveys, meaning millions of people will have increased protection for their property rights due to this law.

Digital “Items” Officially Recognized as Personal Property

CryptoQuant noted that the bill confirms “digital or electronic ‘items’ can be the subject of personal property rights.” UK law divides personal property into two categories: “choses in possession,” like tangible assets such as cars, and “choses in action,” like rights to enforce a contract (intangible assets). The bill makes it clear that “things that are essentially digital or electronic” do not fall outside the scope of personal property rights simply because they are neither “choses in possession” nor “choses in action.”

This legal clarification resolves a longstanding theoretical challenge. Cryptocurrencies are neither traditional tangible property (you can’t physically hold Bitcoin) nor do they fully fit the classic definition of intangible property (they’re not merely contractual rights). The Law Commission’s 2024 report pointed out that digital assets can have characteristics of both and said their ambiguous fit with property law could hinder dispute resolution in court.

Three Practical Impacts of the Property Law for Crypto Users

Clarified Ownership: Possession of a private key now clearly proves ownership, eliminating the need for complex legal arguments in disputes.

Recoverability of Stolen Assets: Law enforcement and courts now have a clear legal basis to handle crypto theft cases.

Inheritance and Bankruptcy Processing: Crypto can now be inherited or distributed in bankruptcy proceedings just like any other property.

These changes may seem technical, but they have far-reaching effects on real-life cases. For example, when a holder dies, heirs have often struggled to claim ownership of crypto because it was not clear if these assets were part of the estate. Now, cryptocurrencies are explicitly included in the estate, like real estate or stocks, and can be distributed according to a will or statutory inheritance rules.

Providing Users with “Clearer Understanding”

CryptoUK stated on X that the law provides “greater clarity and protection for consumers and investors,” giving crypto holders “the same confidence and certainty as with other forms of property.” “Digital asset ownership can be clearly defined, stolen or defrauded assets can be recovered, and they can be included in bankruptcy and estate proceedings,” the report added.

This legal clarity is especially important for institutional investors. Many traditional financial institutions have been cautious about crypto, partly because of concerns over legal uncertainty. Now, with the UK explicitly classifying crypto as property, institutions have a much firmer legal basis to hold and manage these assets.

The organization added that the UK now has “a clear legal framework for crypto ownership and transfer,” and the country is “better equipped to support new financial products, tokenized real-world assets, and the growth of safer digital markets.” This kind of legal infrastructure is vital for the UK’s ambition to become a global crypto hub.

Tokenized real-world assets (RWAs) are a particular area where this law is beneficial. When real estate, art, or commodities are tokenized and traded on blockchains, clear property law ensures the rights attached to these tokens are legally recognized and protected. This could accelerate the digitization of traditional assets, as all participants have greater legal certainty.

UK Crypto Regulation Moves Forward on All Fronts

In April, the UK also announced plans for a crypto regulatory regime that will subject crypto businesses to similar rules as other financial firms, aiming to make the UK a global crypto hub while boosting consumer protection. This property law, combined with the broader regulatory framework, shows the UK is taking a comprehensive and balanced approach.

This balance is seen in two ways: on one hand, clear property law protects user rights; on the other, regulatory systems ensure compliant business operations. This dual approach avoids the extremes of overregulation stifling innovation or excessive laxity leading to inadequate consumer protection.

The comparison with the US is also noteworthy. The US still lacks a federal-level crypto property law, with related questions still debated among state courts and regulators. The UK has resolved this through a single piece of legislation, giving businesses and users much greater certainty. This could give the UK a competitive advantage in attracting crypto firms and talent.

The Financial Conduct Authority reported late last year that about 12% of UK adults own crypto, up from 10% in previous surveys, and this growth trend could accelerate further with increased legal clarity. When people know their assets are protected under clear laws, they are more likely to invest.