The England and Wales Legal Commission has put forward a plan to class digital assets, such as crypto tokens and non-tradable tokens (NFTs), as a distinct form of personal property. They propose calling this new category data objects and granting courts the authority to issue payments tied to these assets. This move would position digital assets alongside existing categories like things owned and things in action within property law.
Supporters of the proposal argue that identifying data objects as a separate legal category would close gaps in how uniquely qualified digital assets are treated, ensuring clearer recognition in legal actions and settlements.
Officials involved note that the reforms are aimed at positioning the United Kingdom as a leading global hub for digital assets by clarifying legal status and reducing friction for market participants and innovators in England and Wales.
Analysts warn that one consequence could be an increase in cash settlements conducted in digital assets through the courts in England and Wales, rather than traditional currency exchanges. This shift would reflect a broader trend of courts engaging directly with tokenized value in resolving disputes.
Document authors say there is a preliminary but persuasive argument for reforming the law to empower the courts to decide cases using mechanisms expressed in crypto terms, rather than restricting remedies to conventional money units. This approach would recognize the practical realities of how value is stored and transferred in digital form.
At present, the Commission is inviting public input during consultations on the draft report. Stakeholders from both the legal profession and the digital technology sector, who regularly use digital assets, are participating to share insights and hopes for how such reforms could operate in practice.
The proposed framework would help courts adjudicate disputes involving data objects by acknowledging their characteristics, such as decentralized issuance, programmable features, and cross-border considerations. Legal scholars and practitioners continue to debate the best methods for harmonizing traditional property law with emerging digital realities, including questions about ownership, control, and transferability in a tokenized world.
Beyond creating a new label for these assets, the commission emphasizes that the reforms would provide clearer rules for recognition, enforcement, and remedies in cases involving digital assets. The goal is to reduce uncertainty for investors, developers, and service providers while preserving robust protections for creditors, counterparties, and consumers across jurisdictions in the United Kingdom.
As proposals move forward, the public consultation process is expected to yield a range of practical recommendations on how data objects should be defined, how they interact with existing categories of property, and how the courts could award remedies that reflect the economic realities of token-based transactions. The outcome could shape the future of digital asset regulation in the region and influence similar discussions in other common law jurisdictions.