United Kingdom Passes Law Recognizing Bitcoin, NFTs, and Stablecoins as Property

The United Kingdom has taken a decisive step toward integrating digital assets into its legal framework with the passage of the Property (Digital Assets etc) Act 2025. This law, which received Royal Assent on December 2, 2025, from King Charles III, formally classifies cryptocurrencies like Bitcoin, stablecoins, and non-fungible tokens (NFTs) as a distinct form of personal property. For years, these assets operated in a regulatory limbo, lacking clear ownership protections that traditional property enjoys. Now, crypto holders can pursue legal recovery in cases of theft or fraud, and the assets can be handled properly in inheritance or bankruptcy proceedings.

This development addresses a longstanding gap in UK property law, which previously recognized only two categories: tangible items such as physical goods and intangible rights like contracts or debts. Crypto assets, stored in wallets and secured by private keys, did not fit neatly into either group, leaving users vulnerable in disputes. The new property act creates a third category tailored to electronic items, providing the legal certainty needed for broader adoption. This clarity could encourage more individuals and businesses to engage with crypto without fear of unresolved ownership claims.

The legislation stems from recommendations by the Law Commission of England and Wales, which completed its review in June 2023 after extensive consultations. Introduced in the House of Lords in September 2024, the bill moved swiftly through Parliament without amendments, reflecting broad support across political lines. Lord Speaker John McFall announced the Royal Assent in the House of Lords, marking the end of a process that began years earlier to modernize laws for emerging technologies. As a result, the act takes effect immediately, offering instant benefits to the millions already involved in the crypto space.

Investor Safeguards and Economic Growth

The creation of this specialized property category delivers stronger protections for crypto users across the UK. Members of the Crypto UK Association have welcomed the change, stating it builds confidence among holders by ensuring assets can be reclaimed if lost to scams or hacks. This legal backing extends to insolvency scenarios, where digital holdings can now be treated equitably alongside other property. Such measures reduce risks that have long deterred cautious investors from entering the market.

Financial authorities anticipate this framework will foster innovation while maintaining stability in the digital economy. The Financial Conduct Authority and Bank of England have emphasized that clear rules help prevent misuse without stifling growth. Recent data from the FCA indicates that around 7 million people in the UK currently own cryptocurrencies, a figure that has grown steadily amid rising interest in digital finance. With these protections in place, experts predict an uptick in participation, particularly as platforms enhance security features aligned with the new law.

This act also aligns with ongoing efforts to regulate specific crypto elements, such as stablecoins. On November 10, 2025, the Bank of England launched a consultation on rules for sterling-denominated systemic stablecoins, which are designed to hold steady value for payments and settlements. The proposals allow issuers to back up to 60% of their assets with short-term UK government debt, balancing safety with business viability. Regulators aim to finalize these guidelines in 2026, ensuring stablecoins integrate smoothly into everyday transactions.

Positioning the UK in Global Digital Finance

By embedding digital assets into its property laws, the UK signals its intent to lead in crypto-friendly regulation worldwide. This move comes at a time when governments are racing to define rules for technologies that could reshape payments and investments. Officials at the Bank of England have expressed determination to match the pace of developments in the United States, where similar frameworks are evolving rapidly. The goal is to create an environment where digital money becomes a standard tool for both retail and wholesale use.

The consultation on stablecoins highlights this forward-thinking approach, exploring their role in everything from consumer spending to financial market settlements. Bank leaders have highlighted the need for resilient systems that support innovation while guarding against risks to financial stability. Temporary measures in the proposals, such as higher asset flexibility during high redemption periods, show responsiveness to industry needs. As these rules take shape, they could pave the way for wider acceptance of digital pounds in daily life.

For the growing number of UK crypto owners, this legislation represents a turning point. It not only secures their holdings but also invites institutions to deepen involvement, from custody services to trading platforms. As the digital economy expands, the UK's balanced regulatory strategy positions it to attract talent and capital in this vital sector. With protections now codified, the path forward looks steadier, encouraging sustainable growth in an industry poised for mainstream integration.