The UK has taken a decisive step in digital asset regulation with the introduction of the Property (Digital Assets) Act 2025. This landmark legislation formally recognizes cryptocurrencies and other digital assets as property under English law, bringing long-awaited legal clarity for banks, FinTechs, investors, and regulators.
For financial institutions operating in or connected to the UK market, the Property (Digital Assets) Act 2025 is more than a legal update. It reshapes how digital assets can be owned, protected, enforced, insured, collateralized, and supervised.
What is the Property (Digital Assets) Act 2025?
On 2 December 2025, the Property (Digital Assets) Act 2025 received Royal Assent, completing its passage into UK law. The Act confirms that digital assets, including cryptocurrencies, tokens, and non-fungible tokens (NFTs) can attract personal property rights, even though they exist in digital form.
Crucially, the Property (Digital Assets) Act 2025 clarifies that an asset is not excluded from property protection simply because it is digital or intangible.
Before the Property (Digital Assets) Act 2025, English law recognised only two categories of personal property:
- Things in possession – physical items that can be held or touched
- Things in action – legal rights enforceable through the courts (such as debts)
Digital assets did not fit neatly into either category, creating uncertainty around ownership, enforcement, insolvency treatment, and dispute resolution.
The Property (Digital Assets) Act 2025 resolves this issue by creating legal space for a third category of personal property, allowing digital assets to be treated as full property under UK law.
Legal experts have described the Property (Digital Assets) Act 2025 as a major step forward. It confirms that cryptocurrencies, NFTs, and tokenised assets can attract the same fundamental property rights as traditional assets, strengthening the UK’s position as a leading digital finance jurisdiction.
What Legal Recognition Under the Property (Digital Assets) Act 2025 Enables.
By recognising digital assets as property, the Property (Digital Assets) Act 2025 allows:
- Owners to take legal action if digital assets are stolen, misused, or misappropriated
- Courts to issue freezing orders and tracing claims over crypto assets
- Digital assets to be recognised in bankruptcy, insolvency, and estate proceedings
- Cryptocurrencies to be treated as custodial assets, collateral, or trust property
This removes long-standing ambiguity and aligns digital assets with established property law principles.
What Property (Digital Assets) Act 2025 Means For Financial Institutions.
- It Encourages Institutional adoption of crypto: The Property (Digital Assets) Act 2025 officially confirms that digital assets, like cryptocurrency, are a form of personal property. This ends years of uncertainty about whether crypto is legally recognized. Banks and other financial institutions no longer have to explain or defend why they treat crypto as property since the law clearly allows it.
This removes a major doubt and gives institutions the confidence to use and offer crypto related services.
- Banks can create crypto products without worrying about basic legal issues.
- Investment firms can safely include digital assets in their portfolios.
- Insurance companies can insure crypto holdings because their legal status is clear.
- Regulators can oversee crypto activities using existing property laws.
- It enables Crypto to be used as collateral in Banks: According to Technology Law AI, the Property (Digital Assets) Act 2025 provides banks and institutional organizations with a foundation to structure collateral arrangements involving digital assets. Banks can now confidently accept cryptocurrency as collateral for loans, credit facilities, and lenders don’t have to worry that if a borrower failed to repay a loan, courts might not recognise their rights to the crypto used as collateral.
- It Protects Crypto during Insolvency: According to Mondaq, The Property (Digital Assets) Act 2025 gives confidence that digital assets can be included in bankruptcy or insolvency cases. Professionals handling insolvency have fewer arguments to deal with and can act faster to protect and recover the assets. If banks or their partners go bankrupt, clear rules about crypto make it easier and quicker to resolve the situation.
- It provides Clear Legal Remedies for Crypto: According to Technology Law, recognising digital assets as property means the courts now have a solid legal basis to issue proprietary remedies such as freezing orders, tracing claims, and equitable relief because the asset is no longer treated as an abstract or legally uncertain thing. Property (Digital Assets) Act 2025 reduces ambiguity in enforcement and gives creditors and other parties greater confidence that remedies tied to property law will apply.
- Documentation and Compliance Rules:
According to this article,
- Custodians must review trust structures, insolvency protections, and client documentation. This is because digital assets are now formally property, so custody arrangements must ensure legal enforceability and protection in insolvency scenarios.
- Compliance officers will face more requests for freezing and tracing assistance because courts can now issue proprietary remedies with confidence, so compliance teams will be involved in implementing and monitoring these legal measures.
- Treasury teams should revisit collateral frameworks and check if documentation needs amending. Reason being that, digital assets as property can be used as collateral; documentation must reflect ownership, transfer rights, and security arrangements.
- Wealth advisors must systematically integrate digital assets into estate planning as property, digital assets can be included in wills, trusts, and succession plans.
- Litigators will find proprietary remedies more accessible and effective as legal recognition removes ambiguity, making enforcement and litigation clearer and more predictable.
How A&D Forensics Can Help Your Institution Navigate the Property (Digital Assets) Act 2025.
As Africa’s leading blockchain intelligence and compliance services provider, A&D Forensics supports financial institutions, regulators, and crypto service providers in adapting to evolving digital asset regulations, including the Property (Digital Assets) Act 2025. Our services include:
- AML/CFT Compliance for Cryptocurrency and Digital Assets: We help banks, fintechs, telecom companies, and crypto service providers set up strong anti-money laundering (AML) and counter-terrorism financing (CFT) systems.
- Cryptocurrency Compliance and Cryptocurrency Investigation Training: Through our Certified Cryptocurrency Investigator (CCI) and Certified Cryptocurrency Compliance Specialist (3CS) programmes, we equip teams with the skills to manage crypto-related risks confidently.
- Smart Contract Audits: With digital assets now recognised as property, smart contract security is critical. Our Smart Contract audits help organisations launch securely, reduce vulnerabilities, and build institutional trust.
- Regulatory Supervision Solutions for Cryptocurrency Oversight:
We provide regulators with tools and expertise to supervise Virtual Asset Service Providers (VASPs), monitor compliance, and identify suspicious trends across the crypto ecosystem.
CONCLUSION: Why the Property (Digital Assets) Act 2025 Changes Everything
The Property (Digital Assets) Act 2025 represents a major milestone in digital asset law. By formally recognising cryptocurrencies and other digital assets as legal property, the UK has removed a key barrier that previously limited institutional participation. For banks and financial institutions, the message is clear: digital assets are no longer legally uncertain instruments, they are recognised property with enforceable rights. This clarity paves the way for safer adoption, stronger compliance, and more mature digital finance products.
Contributor:
Ms. Ife Ademola
