Property (Digital Assets etc) Bill [Lords]

Kieran Mullan Excerpts

2nd reading
Wednesday 16th July 2025 Commons Chamber

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

I rise on behalf of the official Opposition to express our support for the Property (Digital Assets etc) Bill. I do not have the benefit of being a learned Member like the Minister, so I have enjoyed getting to understand what property law looks like in the UK.

As the Minister said, this Bill comes before this House from the other place, where it has already received careful and considered scrutiny. I particularly acknowledge the contributions made there by the noble Lord Holmes of Richmond, whose deep expertise in digital and emerging technologies greatly enriched the debate, and the noble Lord Sandhurst, who rightly described this Bill as

“a necessary but appropriately constrained measure.”—[Official Report, House of Lords, 6 November 2024; Vol. 840, c. GC284.]

This Bill both preserves the inherent flexibility of the common law and provides just enough statutory clarity to support continued innovation and legal certainty in a fast-moving world.

Recognising the need in 2020, the previous Conservative Government asked the Law Commission to examine how the law of personal property should respond to digital assets. The commission undertook extensive consultation and concluded that some assets defy current classification. In response, it recommended confirming in statute that assets need not be things in possession or in action to attract property rights, paving the way for a third category of personal property and ensuring that our common law can continue to evolve with confidence and coherence.

This may be a short Bill, but it carries significant weight for not just the UK’s legal framework, but our global reputation as a leader in digital innovation. As other jurisdictions watch how we respond to technological change, this Bill reaffirms the UK’s commitment to legal clarity, innovation and economic competitiveness. We have a world-leading fintech ecosystem, and with trillions of pounds in digital asset transactions expected globally by the end of the decade, the UK must ensure that it remains at the forefront, supporting innovation, financial inclusion and the future of capital markets.

This Bill also complements a wider programme of regulatory reform already under way in the UK. Since 2023, firms promoting crypto assets have been subject to Financial Conduct Authority rules, including mandatory risk warnings and a 24-hour cooling-off period for new consumers. Anti-money laundering rules apply, and crypto firms must register with the FCA. In 2025, the Government published draft legislation to bring a wider range of crypto assets activities, such as trading platforms and custody services, under full financial regulation. The FCA and the Bank of England are also consulting on new rules for stablecoins, prudential safeguards and the safe custody of digital assets, while the Bank explores the future of a potential central bank digital currency, the “digital pound”. Those efforts, taken together with this Bill, represent a joined-up and forward-looking approach to digital asset regulation in the UK.

As the Minister explained, for centuries the law has recognised two traditional categories of personal property: things in possession, referring to tangible objects such as a bar of gold, and things in action, such as debts or contractual rights enforceable only through legal process. However, the rise of the digital economy has introduced a growing range of assets that defy those historical classifications.

From crypto tokens and digital files to in-game items and carbon credits, individuals and businesses now interact with a third category of asset. This Bill introduces that third category of personal property by confirming what the courts have been increasingly willing to suggest: that a thing is not precluded from being treated as property merely because it does not fit the traditional mould. It does so in a deliberately modest way, allowing the common law to evolve with technological change, rather than attempting to predict or prescribe it.

As Lord Sandhurst put it in the other place, we should champion the flexibility of the common law and legislate only to reinforce and clarify developments already emerging within it. This Bill strikes the right balance: it is principled in substance but careful in its implications. It gives confidence to our courts, clarity to commercial actors and reassurance to individuals navigating digital ownership. We welcome the Government’s amendment in the other place to extend this legislation to Northern Ireland and the agreement of the Northern Ireland Assembly to that extension. I understand that the Scottish Government have consulted separately on the question of recognising crypto tokens as property under Scots law.

Let me take a moment to welcome the Government’s stated intention in the impact assessment of reducing the burden on businesses by improving clarity in this space. At a time when digital assets are increasingly used as a means of payment, representation or value storage, it is vital that our legal architecture keeps pace—not to control innovation, but to support it with the rule of law. We on the Conservative Benches are committed to ensuring that our legal system remains fit for the 21st century and can accommodate new technologies while safeguarding rights and responsibilities.

While we are pleased to support this Bill, let us not lose sight of the broader context. After a year of downgraded growth forecasts, our economy contracting, unemployment and inflation rising and borrowing costs creeping up, the UK urgently needs legal reforms that drive up competitiveness and economic growth. Like the recent reforms to our international legal procedures, it is no coincidence that this Bill stems from a review commissioned by the last Conservative Administration—a Government who really understood the importance of forward-thinking legal reform to support technological and financial innovation to drive economic growth.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.