Property (Digital Assets etc) Bill [Lords]
(1 day, 3 hours ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The First Deputy Chairman of Ways and Means (Judith Cummins)
With this it will be convenient to discuss clause 2 stand part.
I remind Members that in Committee they should not address the Chair as Mr or Madam Deputy Speaker, but use our names. Madam Chair, Chair or Madam Chairman are also acceptable.
The Minister for Courts and Legal Services (Sarah Sackman)
It is a pleasure to serve under you, Madam Chair.
I am pleased to open this discussion on the clauses of a focused but important Bill, designed to drive innovation, enhance legal certainty, and strengthen our standing in the global digital economy. Let me turn first to clause 1—an unassuming clause on the page, but one with important implications for the future of our legal system and our economy.
Clause 1 is the engine room of the Bill. It provides a clear and powerful statement: that a thing—including something digital or electronic—can be recognised as personal property, even if it does not fall within either of the categories that our legal system has traditionally recognised. For centuries the law has drawn a simple line: personal property was either a “thing in possession”, that being a physical object such as a car or a watch, or a “thing in action”, something that exists because the law says it does and is enforced through legal action, such as a debt or a contractual right. However, the world has changed. Technology has leapt forward, and our law must keep pace. Today we have assets such as crypto-tokens. They are not physical objects, yet their existence is not reliant on the law. They do not fit comfortably into either of the traditional categories.
Our courts have begun to acknowledge that such assets can and should be the subject of property rights, but without a clear, binding legal foundation, uncertainty remains—uncertainty that could stifle innovation, deter investment, and push the digital economy elsewhere. This Government will not allow that to happen. Driving sustainable growth is a top priority for us, and that means giving businesses and investors the certainty that they need to thrive. With this single clause, we are removing doubt and sending a clear message: we are open for business in the digital age.
By removing ambiguity, clause 1 ensures that those who hold or transact in digital assets are better supported to defend their property rights, transfer them and recover them when it matters most. The Bill reinforces our position as a global jurisdiction of choice for legal innovation, emerging technology and the digital economy. We are leading from the front. To be clear, clause 1 does not attempt to draw rigid lines around what qualifies as property—that is a deliberate choice. It rightly empowers our courts to continue developing the common law, case by case, applying centuries of legal wisdom to the frontiers of a digital economy. The reference to “digital or electronic things” in the Bill simply reflects where the issues most commonly arise today, without boxing in where the law might go tomorrow. The clause paves the way for fairer outcomes in cases of theft, fraud, commercial dispute or insolvency involving digital assets. It will reduce litigation costs, promote market stability and underpin our reputation as a jurisdiction of choice in a digital world. This is a small clause with big consequences. It is a bold, forward-looking step that reaffirms our commitment to legal certainty, technological progress and global leadership.
Clause 2 sets out the title, territorial extent and commencement date. Once granted Royal Assent, the legislation will become the Property (Digital Assets etc) Act 2025. That title—Digital Assets etc—is no accident. It has been carefully chosen to capture the technologies of today, such as crypto-tokens, while keeping the door open to future innovations. This is a law built not just for now but for what may come next. The Act will extend to England and Wales, and Northern Ireland. That will minimise legal discrepancies across jurisdictions and help to ensure that the benefits, such as legal clarity, investor confidence and streamlined dispute resolution, are more widely felt across these jurisdictions. I draw the Committee’s attention to the fact that the Bill does not extend to Scotland, owing to differences in property law. However, the Scottish Government introduced their own Digital Assets Bill on 30 September, confirming that certain kinds of digital assets can be objects of property under Scots private law.
Importantly, the Act will come into force the moment it receives Royal Assent—no delays, no retrospective effect—because the legislation does not create new burdens. It confirms and clarifies the law as it has been developing under common law. As a result, there will be immediate certainty, minimal disruption, and a strong foundation for our digital economy. I commend the Bill to the Committee.
The First Deputy Chairman of Ways and Means (Judith Cummins)
I call the shadow Minister.
Dr Kieran Mullan (Bexhill and Battle) (Con)
I am pleased to speak again on behalf of the Opposition as we carry forward the constructive debate that we had on Second Reading.
Let me restate from the outset our support for the Bill, which represents a careful, modest step in the right direction, and preserves the inherent flexibility of the common law while giving just enough statutory certainty to ensure that businesses, innovators and courts know the ground beneath their feet. That balance is vital. If we over-prescribed in statute, we would risk freezing progress. If we left matters entirely to the interpretation of the courts, we would risk fragmentation and delay. The Bill avoids both extremes.
Importantly, this legislation was not born overnight. It is the product of the rigorous work of the Law Commission—work commissioned by the last Conservative Government, who recognised early the need for clarity in this space if the UK was to stay competitive internationally. The commission’s conclusion was clear: certain digital assets simply do not fit neatly into the centuries-old categories of things in possession or things in action. Without intervention, the risk grew that uncertainty would hold back investment, undermine commercial transactions and frustrate innovators and consumers.
The Bill answers that challenge in the right way. It does not attempt to define every kind of digital asset that might emerge. Nobody in this Chamber—or indeed beyond it—can predict the full scope of the technologies that will shape our financial and commercial future in the coming decades. Instead, the Bill does something both restrained and profound: it confirms that digital things are not excluded from attracting property rights merely because they fall outside the old categories. Beyond that, it gives our common law the space it needs to continue doing what it has done for centuries: develop sensibly, case by case, guided by principle rather than by prescription.
That is not to say that the state has been inactive in related causes. Since 2023, cryptoasset promotion has been subject to the Financial Conduct Authority rules, the money laundering regulations have been amended for the new cryptocurrency class, and the Government have consulted on bring crypto-trading platforms and custody services within the broader perimeter of financial regulation. The Bank of England and the FCA are exploring robust frameworks for stablecoins and custody. However, none of this works unless the foundational question, “What is the legal status of these assets?”, is clearly answered. That is exactly what the Bill provides.
Let me end by reiterating what I said on Second Reading: the UK must remain at the forefront of global legal innovation. When technological change accelerates, the temptation can be either to rush into rigid regulation or to do nothing at all. The Bill avoids both pitfalls. It is proportionate, it is principled, and it is rooted in the understanding—championed strongly by the previous Conservative Government—that legal certainty is a foundation for growth, investment and innovation in this area. For all those reasons, the Opposition will continue to support the Bill, and we look forward to working constructively to ensure that it delivers the clarity that our courts, consumers and businesses need.
Mr Will Forster (Woking) (LD)
It is a pleasure to speak once again in this Chamber on the Property (Digital Assets etc) Bill, which creates a modern legal framework that will allow Britain to take every opportunity we can while protecting ourselves in an ever-changing digital age.
The Liberal Democrats support clause 1. It states that a “thing”—including a digital or electronic thing—will not be deprived of legal status as an object of personal property rights merely by reason of the fact that it is neither a thing in action nor a thing in possession. The clause responds to the development of new types of assets such as crypto-tokens, which challenge the traditional categories of property. I am grateful to the other place for scrutinising this legal framework incredibly well. As a result, we have a fine piece of legislation to discuss.
The digital world is often mired in legal ambiguity about how common-law systems treats digital assets. At present, the law recognises two primary forms of personal property: things in possession and things in action. However, digital assets, which cannot be physically possessed and often do no count for a claim against another person, do not really fit easily into either category. The need for clarity is imperative. We risk undermining individual rights and weakening legal solutions in cases involving cryptoassets, non-fungible tokens and other digital holdings.
The Bill goes far in ensuring that digital things are not denied property status simply because they do not fall into the normal categories. Consequently, we also support clause 2, as it requires the Secretary of State to publish codes of practice on the attributes of digital things that confer personal property rights. The clause aims to provide guidance to the courts on how to assess whether a digital asset is the object of personal property rights.
The Liberal Democrats welcome the Government’s decision to accept the Law Commission’s recommendations. Financial Conduct Authority figures indicate that nearly 12% of UK adults now hold cryptoassets—I know because constituency cases are raised with me when things go wrong—and that figure has more than doubled since 2021. However, victims of fraud, people seeking restitution in insolvency, or simply those wishing to assert ownership over what they rightfully hold, have been operating in a murky legal landscape. The Bill leaves room for the common law to develop in that sphere of property. That will help the law to reflect the evolving nature of technology, but it must be monitored over time to ensure that regulation ultimately aligns with the need to protect individual rights and support our economy.
We know that digital assets can also present risks, particularly fraud, volatility and abuse, but we cannot ignore them; we must face them head on. We need a modern legal framework that bolsters confidence in our economy and in the use of digital assets, and supports the rule of law. The Bill is clear, well written and makes doubly sure that UK law remains relevant in the digital world. It is supported by the Law Society, by legal practitioners and by the Liberal Democrats. I urge colleagues on all sides of the Committee to support its passage.
Sarah Sackman
With the leave of the Committee, I give my sincere thanks to the hon. Members for Bexhill and Battle (Dr Mullan) and for Woking (Mr Forster). It has been a pleasure to discuss the clauses in more detail, and it is good to see constructive consensus about a piece of legislation. I think we all agree that it brings legal certainty, keeps pace with legal innovation, is proportionate, and meets the moment, with the growth of cryptocurrency and other related industries. I thank all those who have contributed to this important debate.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
The Deputy Speaker resumed the Chair.
Third Reading
Sarah Sackman
I beg to move, That the Bill be now read the Third time.
Let me I start by reiterating my sincere thanks to Members of this House and the other place for their support and insightful contributions. I am particularly grateful for the support expressed on Second Reading by the hon. Members for Bexhill and Battle (Dr Mullan) and for Woking (Mr Forster), and all Members who have contributed throughout the passage of the Bill. Their engagement demonstrates strong, cross-party momentum behind modernising our personal property law.
I also pay tribute to the former Special Public Bill Committee, which gathered expert evidence and was ably led by Lord Anderson of Ipswich. The Law Commission deserves particular recognition for its exemplary work, led by Laura Burgoyne and Christopher Long, and on which this Bill stands. Their engagement with stakeholders has been gold standard and demonstrated the benefits of coherent law reform—transparent, expert-led and deeply consultative. I would also like to thank the former law commissioner Professor Sarah Green for her contribution to this work and for giving evidence at Committee.
Lastly, I put on record my thanks to the officials who have worked tirelessly on this Bill. I thank my policy officials, Alicia Love and Jonathan Fear, the Bill managers, Harry McNeill-Adams and Lily Sullivan, and Helen Hall from the Office of Parliamentary Counsel. I also thank my private office, in particular my private secretary, Amelia Overton, and Meheret Ashenafi.
This is more than a Bill; it is a landmark step towards ensuring that the law of England and Wales, and Northern Ireland, not only keeps pace with innovation but leads it. The Bill will give digital pioneers the certainty they need, backed by the legal strength they expect from our country. It shows that our economy is open, our ambition is global, and we are here to support innovation. By supporting the recognition of digital assets as property, the Bill helps establish legal certainty.
The Bill gives industry the confidence to innovate here, knowing that our legal system can support new models of ownership, transfer and settlement. This is how we translate legal reform into economic leadership. It is how we show that we are at the forefront of the technical revolution, and how that can be seen in the real world with the London Stock Exchange’s announcement of a new digital asset platform. This is the first major global stock exchange to implement a blockchain-based system.
This Government are backing growth, backing technology and backing Britain’s future, and as such, I commend the Bill to the House.
Dr Mullan
I rise simply to put on the record my thanks, particularly to the Bill Committee and to the Law Commission for its diligence. Yet again we see the great benefit that our state machinery and apparatus as whole derive from having the Law Commission. I have nothing further to add.
Mr Will Forster
I thank colleagues from across the House. It is a good example of cross-party working, delivering a Bill that has been well-scrutinised and is fit for purpose. In that spirit, I hope that the Minister can take that away and encourage her colleagues to do the same with other legislation.
Question put and agreed to.
Bill accordingly read the Third time and passed, without amendment.