Cryptocurrencies and other digital assets have become increasingly mainstream. Initially, legal frameworks were slow to catch up, but this began to change last year. This article by Jack Mitchell, a Solicitor in the Banking and Finance team at Shepherd and Wedderburn, recaps the key developments, and looks at what might be coming next.
Scottish legislation
In September, the Digital Assets (Scotland) Bill was introduced to the Scottish Parliament. As currently drafted, it attempts to define what digital assets are and sets out rules for transferring them. The Bill is currently at Stage 1 and is being examined by the Economy and Fair Work Committee, which has been taking evidence, including from Shepherd and Wedderburn’s Financial Sector Head, Hamish Patrick. The Bill is likely to pass into law before the Scottish elections in May. It remains to be seen whether it will change significantly as it progresses through parliament.
English legislation
The equivalent English legislation – the Property (Digital Assets etc) Act 2025 – came into force in December, and confirms the status of digital assets under English property law. However, unlike its sister legislation north of the border, it does not attempt to define a ‘digital asset’, nor does it set out specific rules governing their transfer. Instead, such complexities have been left to be worked out through case law in the English courts. It will be interesting to see how the courts’ treatment of digital assets develops this year.
The Jurisdiction Question
One of the fundamental difficulties with any legal framework for cryptocurrencies or other digital assets is the decentralised nature of distributed ledger technology. It is composed of multiple layers, each of which can be distributed across the world in various jurisdictions, and so for any given transaction it can be difficult to discern one specific national legal framework that should apply. The Law Commission of England and Wales published a consultation paper in 2025 that discussed this issue in depth. The consultation period has now closed, and the Law Commission is analysing the responses. A final report is due this year, and its findings may influence the courts’ approach to this particularly tricky issue.
Regulation
2025 saw the passage of the GENIUS Act in the US, a landmark piece of legislation that created a federal regulatory framework for stablecoins (cryptocurrencies that are pegged against a fiat currency, often the US dollar).
On this side of the pond, the Financial Conduct Authority released several consultation papers in 2025, including CP25/14 (Stablecoin Issuance and Cryptoasset Custody), CP25/15 (A prudential regime for cryptoasset firms), and CP 25/25 (Application of FCA Handbook for Regulated Cryptoasset Activities), followed in December by CP 25/40 (Regulating cryptoasset activities), CP25/41 (Regulating cryptoassets: Admissions & disclosures and market abuse regime for cryptoassets) and CP25/42 (A prudential regime for cryptoasset firms), which builds on CP25/15. In addition, the Financial Services and Markets Act (Cryptoassets) Regulations were laid at Westminster in December, and will set out some regulatory parameters around the cryptoassets market.
Once the Regulations come into force, and following publication of final FCA rules following on from their consultations and a transitional period as indicated in the FCA’s crypto roadmap, we will hopefully have a more comprehensive new UK-wide ‘crypto regime’ going live towards the end of the year.
An important year ahead…
While there are still issues to be resolved, last year’s developments were a step forward for the legal treatment of digital assets in Scotland and the UK. Businesses who deal with digital assets – whether or not they are in the FinTech sector – should monitor the implementation of these proposals in 2026 to ensure that they are compliant when the new regimes go fully live.
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