Technology and commerce have always gone in hand in hand — ranging from innovation to production to operation. However, for some time, commercial uncertainty has existed over the legal recognition and protection of digital assets (e.g. crypto-tokens), which many argue has hampered business and innovation. The Property (Digital Assets etc.) Act 2025 (“PDA 2025”) came into force on 2 December 2025 in an attempt to remove such uncertainty, as the PDA 2025 expressly recognises that digital assets can constitute property.
Therefore, not only is the law now able to keep pace with technology, it is also hoped that the PDA 2025 will be key in a new era of digital innovation.
The Background
Although many organisations will benefit from the clarity in relation to the ownership of digital assets, it is important to understand why this legal development was required and may be important for your business.
Previously, personal property (which alongside IP are key assets of your business) was a ‘thing’ in possession (i.e. tangible and capable of physical possession) or a ‘thing’ in action (i.e. property capable of claim or enforcement only through legal action). Digital assets, which by their nature are intangible, did not easily fit within this archaic classification. Therefore, businesses faced uncertainty in relation to their rights in digital assets. The law had lost pace with the digital world of commerce, and uncertainty is never a good foundation for business.
The Solution
The PDA 2025 provides that a ‘thing’ (e.g. a digital asset) is not prevented from being subject to property rights due to the fact that it does not fit the traditional classifications or categories of personal property discussed above.
Although not defining the types of ‘things’ that qualify as property, the PDA 2025 has established that a ‘thing’ that is digital or electronic in nature is not prevented from being personal property. Therefore, the PDA 2025 has paved the way for digital asset property rights recognition.
Key Benefits to your Business
Confidence and innovation — the key commercial benefit is market confidence and assured innovation. Certainty equates to confidence. Such legal certainty is likely to encourage the wider adoption of digital assets in commerce and commercial transactions (e.g. mainstream banking systems and investment funds increasing their use of digital assets) while advocates believe that such certainty will also stimulate innovation (e.g. the development of new fintech products).
Reducing commercial litigation — the hope is that this legal development will mean that there will not be a need to debate whether or not an asset is property if it falls outside the traditional categorisation of personal property. Time will tell in this regard.
Times are changing in the world of digital assets and commerce — certainty breeds opportunity, and opportunity breeds innovation and revenue. Importantly, the Wild West nature of digital assets may be coming to an end.
For more information on the Property (Digital Assets etc.) Act 2025, contact our commercial solicitors.
