The United Kingdom (UK) has reached a significant milestone in its approach to digital assets with the recent passage of the Property Act 2025, which now officially categorizes cryptocurrencies as legal property. 

UK’s New Law Sets Criteria For Digital Assets

The creation of this dedicated legal category for digital assets followed recommendations from the Law Commission, which advocated for a framework that acknowledges assets not fitting traditional definitions of personal property.

This legal evolution is seen as part of a broader strategy to position the UK as a leading digital finance hub, responding to experts’ calls for the country to align its regulatory environment with that of the United States in order to promote growth in the digital asset market. 

According to law firm Clyde & Co, a key provision in the law states that “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) a thing in possession, nor (b) a thing in action.” 

This phrase confirms that digital assets can now be recognized as a third category of personal property, distinct from the traditional classifications of tangible and intangible assets.

However, the Act does not guarantee that any specific type of asset qualifies as personal property; rather, it aims to “unlock” the common law’s ability to adapt to technological advancements and new asset types, as outlined in the Explanatory Notes from Parliament. 

The interpretation of existing digital assets—such as cryptocurrencies and non-fungible tokens (NFTs)—as well as any emerging forms will ultimately depend on future court rulings. 

The law firm also noted that, under this new law, a digital asset must meet certain criteria to qualify as personal property: it must be definable and identifiable by third parties and capable of being assumed by them, as well as possess a degree of permanence.

Additionally, digital assets will be included in bankruptcy and insolvency proceedings, allowing them to be treated as part of the overall asset pool available to creditors and heirs. 

Government Moves To Ban Crypto Donations

While momentum continues for digital asset recognition, the UK government is also addressing concerns surrounding cryptocurrency in the political sphere. 

Ministers are reportedly working on legislation aimed at banning political donations made through digital currencies, although this crackdown may not be ready in time for the upcoming elections bill in the new year. 

Officials have raised alarms that cryptocurrency donations pose risks to the integrity of the electoral process, primarily due to their difficult-to-trace nature, which could open the door to exploitation by foreign entities or criminal organizations.

At the time of writing, the market’s leading cryptocurrency, Bitcoin, was trading at $92,180, surging 4% in the past 24 hours. 

Featured image from Shutterstock, chart from TradingView.com 

The UK has declared a fresh crackdown on cryptocurrency holdings. The concept compels digital asset providers, including exchanges, to provide precise financial information about UK taxpayers. 

Major Shift In Crypto Trading Oversight

According to the Financial Times, cryptocurrency holders have been cautioned that, starting January 1, 2026, major cryptocurrency exchanges will be mandated to collect extensive transaction records from their UK customers. 

This includes crucial details such as purchase prices, selling amounts, and profits accrued from these transactions, as part of a broader initiative to combat tax avoidance.

His Majesty’s Revenue & Customs (HMRC) will gain further visibility into the financial activities of cryptocurrency holders as these exchanges are tasked with recording and eventually sharing this information directly with the tax authority. By 2027, HMRC will receive these detailed reports.

Experts have issued a warning to individuals trading in digital currencies—from Bitcoin (BTC) and Ethereum (ETH) to lesser-known tokens—to ensure they are accurately reporting their profits in their self-assessment tax returns. 

Seb Maley, CEO of tax insurance provider Qdos, emphasized that this development represents a fundamental shift in how digital asset trading is monitored from a tax perspective. “HMRC will soon know exactly who is making gains—and how much,” he stated. 

Maley noted that anyone involved in cryptocurrency must ensure that they are documenting their gains on their tax returns, as the new regulations will enable HMRC to cross-check this information against the records received from platforms.

Turkmenistan’s New Law on Digital Assets

In Asia, Turkmenistan has officially moved towards embracing digital assets by enacting a new law that legalizes and regulates cryptocurrencies, including provisions for licensing digital asset exchanges and mining entities. 

This significant development was reported by the state media on Friday, following the signing of the law by President Serdar Berdymukhamedov. The legislation is set to take effect on January 1, 2026.

One of the alleged reasons behind this move is Turkmenistan’s desire to diversify its economy, which has long relied heavily on exporting natural gas, primarily to China. 

A government spokesperson told Reuters on Friday that the newly implemented law aims to attract investment and foster digitalization within the country, aligning with global trends in the digital economy.

The legislation outlines regulations governing the creation, storage, placement, utilization, and circulation of virtual assets in Turkmenistan. It also clarifies the legal and economic status of these assets, marking a significant step toward establishing a structured framework for the digital asset industry.

Featured image from DALL-E, chart from TradingView.com