Digital assets: A big opportunity with some difficult legal questions

First published in The Scotsman.

The UK aims to become a global hub for cryptocurrencies and other digital assets, yet the legal framework for this market remains fragmented. It is also rapidly changing: new rules are emerging, alongside case law that continues to test foundational questions of property and enforcement. Businesses, investors and institutions operating in the UK can clearly see the opportunities in digital assets… but the current legal situation creates considerable uncertainty.

To help to provide a better foundation for growth in the industry, the Scottish Government introduced the Digital Assets (Scotland) Bill to the Scottish Parliament on 30 September 2025. It follows a similar bill that recently passed its third reading in the House of Lords – the Property (Digital Assets etc) Bill – which will clarify the status of digital assets in English property law.

The two bills’ practical results are intended to align in relation to issues like ownership, transfer and security. However, the Scottish bill goes further than its English equivalent in attempting to define what digital assets are, and in setting out rules governing their transfer. Over time, the two legal systems may diverge in these areas.

One of the fundamental issues for any legal framework for digital assets is the decentralised nature of distributed ledger technology, which makes it difficult to determine one individual jurisdiction that would have primacy in disputed transactions. The Law Commission of England and Wales recently issued a consultation paper on the treatment of digital assets in international private law, which said: “The problem is not that the objects have no genuine connections to a single territory. Rather, it is that they exhibit too many genuine connections to too many territories, each in equal measure.”

This creates a big problem: if there is no reasonable degree of certainty about what law will be applied, or whether any particular court decision will be enforced internationally, it remains necessary to consider various legal systems simultaneously.

Nevertheless, the development of dedicated legislation for digital assets in the UK represents a significant step in integrating blockchain-based innovation into the mainstream financial system. Clearer treatment of the property and insolvency aspects of digital assets will give greater certainty to investors, lenders and custodians, encouraging adoption by both institutions and fledgling digital-finance ventures. At the UK level, the new legislation – together with more focused regulation – should promote stable markets, reduce legal risk, and support the growth of compliant crypto, tokenisation and other digital asset projects. In the medium term, this framework is likely to enhance the UK’s reputation as a safe and innovation-friendly hub for digital finance.

For Scotland, where the FinTech sector already employs more than 11,000 people, the Scottish bill offers an opportunity to carve out a specialist niche in digital assets by building on its strengths in financial services, technology and academic research. Some projections estimate that the value of the blockchain technology market in Scotland alone could reach £4.48 billion by 2030. The opportunity is huge, if the legal uncertainties can be clarified.

Since publication this article has been amended to reflect the Property (Digital Assets etc) Bill passing its third reading.

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