The Property (Digital Assets etc.) Bill passed 3rd Reading in the House of Lords on 8 May 2025 and will now move to the House of Commons
to go through its legislative stages there. It has been a privilege to serve on the Special Public Bill Committee for this important legal change developed by the Law Commission of England and Wales.
This legal change is designed to clarify the potential property rights that can attach to digital assets and the legal protections and obligations that flow from that. Current uncertainty stems from existing property law distinguishing between either a (tangible)
thing in possession or an (intangible) thing in action.
When the Bill was introduced to Parliament the long title was "A Bill to make provision about the types of things that are capable of being objects of personal property rights" -
although the text of the Bill had a slightly different emphasis stating "a thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither a thing in possession,
nor a thing in action."
It may not seem that important a distinction. In functional terms the difference between 'being capable of' and 'not prevented from being' may not be huge but I believe that for clarity, consistency, and certainty it was worth 'tidying up' the language in
the Bill and ensuring the long title and the operative clause were the same. I proposed an amendment to the Bill - that the long title be changed to match the operative clause so that both would use the same language. I was delighted that the Minister and
my committee colleagues agreed with my amendment and the Bill now refers, consistently, to the types of things that are not prevented from being objects of personal property rights.
We have the good fortune of being home to a thriving fintech community and the advantage of English common law. The world is watching when we pass this legislation, and the signal that the Bill sends out is critically important. That signal—the signposting—means
that, if anyone, anywhere on the planet, merely reads only the long title, they will understand what it is all about and how it is going about it.
On the subject of signposting and the UK’s approach generally to digital assets there has been important activity recently from the Financial Conduct Authority (FCA) and the Treasury.
On 2 May 2025, the FCA published a new discussion paper, Regulating Cryptoasset Activities, seeking feedback on the future regulation of "cryptoasset trading platforms, intermediaries, cryptoasset lending and borrowing, staking and decentralised finance,
and the use of credit to purchase cryptoassets".
Key proposals include requiring UK authorisation for platforms serving UK retail clients, enforcing transparency and conflict-of-interest rules, banning, or heavily regulating, crypto lending to retail consumers, and introducing safeguards for staking activities.
The FCA stresses their focus on enhancing consumer protection, ensuring market integrity, and promoting responsible innovation in the crypto space.
Days earlier, on 29 April 2025, HM Treasury unveiled draft legislation for crypto regulation (Draft SI and Policy Note). This takes a notably different path from the EU’s MiCA framework. While it allows foreign stablecoin issuers—such as those under U.S.
oversight—to operate in the UK without needing a liquidity buffer or white paper, it introduces ambiguity by classifying “qualifying cryptoassets” and “qualifying stablecoins” as specified investments under the Financial Services and Markets Act 2000 (FSMA).
Does this blur the line between stablecoins as securities versus payment instruments? The framework implies that firms offering staking or stablecoin services may be treated as investment firms, raising questions about how hybrid tokens like USDe—used for
both yield and payments—will be regulated. Additionally, trading firms must register in the UK and act as principal on trades with UK clients, complicating cross-border liquidity.
Does the UK’s approach offer valuable flexibility by avoiding MiCA’s rigid pre-launch requirements or does it lack the clarity needed for innovation to thrive? I would urge anyone interested in this space to get involved with the FCA's call for feedback,
it's open until 13 June, link here or email:
dp25-1@fca.org.uk.
As we move towards a global digital data asset economy leadership is essential and it is encouraging that the new government has championed the Property (Digital Assets etc.) Bill that had been set in motion by the previous government. Indeed, when announcing
the bill, justice minister Heidi Alexander stressed global leadership in crypto and common law stating that “this legislation will mean that the sector can maintain its position as a global leader in cryptoassets and bring clarity to complex property cases.”