Taking control of your digital assets: how the Digital Assets (Scotland) Bill might impact you and your business

The Digital Assets (Scotland) Bill (the “Bill”) proposes to establish a foundation for the treatment of digital assets in Scotland. This will allow them to be managed with more certainty as a form of property, capable of being owned, transferred and protected.

The Bill is expected to promote innovation and boost confidence in Scotland’s FinTech ecosystem, and will provide clarity to individuals’ estate planning. A Call for Views is currently open until 12 November 2025.

The Bill has been introduced with the aim of aligning the law with modern digital realities, and reflects many of the findings of the government consultation on digital assets in Scots private law. It follows the recently proposed Property (Digital Assets Etc.) Bill, which similarly seeks to support the property status of digital assets in England & Wales and Northern Ireland.

The Bill defines a digital asset as a thing that arises from an electronic system that makes it “rivalrous” – in other words, the system itself ensures that only one person can use or transfer the asset at a time – and which exists independently from the legal system. Examples include cryptocurrency and non-fungible tokens, but the definition is deliberately technology-neutral and could extend to other tokenised assets that meet these conditions.

The Bill classes digital assets as incorporeal moveables (intangible property, like debts or shares). However, for the purposes of acquiring or transferring ownership, the Bill treats them as though they were corporeal moveables save that exclusive control is to be treated as the equivalent of physical possession. ‘Exclusive control’ means having the sole ability to initiate transactions involving the asset, such as transferring or divesting it. A person who has exclusive control of a digital asset is presumed to own it, and a good faith purchaser for value can acquire ownership even if the seller’s title was defective.

Businesses

A more formalised regime based on control will mean that commercial contracts must evolve. Careful drafting will be essential to avoid unintentional transfers of ownership and to ensure that representations about control and title are accurate. For example, contractual definitions of “control” will have to capture operational realities – such as how access is granted, delegated or revoked – and evidence trails will be vital to prove ownership. Risk and insurance will also have to be considered differently if digital assets have a firmer footing as a form of property.

Due diligence on digital assets will have to focus on who holds exclusive control and whether a reliable chain of ownership can be established. Traditional forms of ownership verification may have to be supplemented with technical verification in order to properly understand who owns a digital asset – for example, examining how control is exercised within a wallet, smart contract, or system architecture. Understanding who can trigger transactions or revoke access will become a key legal question. As technology design increasingly determines control, the development of systems and custody arrangements will need to be considered through a legal lens in order to avoid inadvertent transfers or gaps in ownership.

If the Bill is passed, businesses will have to review how they hold, record and manage digital assets. Whilst the Bill provides certainty and promotes innovation, it also brings new responsibilities. Businesses will have to ensure that they can evidence control and thus ownership of digital assets, and should review internal policies for managing and dealing with digital assets. Cybersecurity will become even more relevant, as access is a crucial element to control.

Financial regulation

In the context of financial regulation, the UK-wide definition for a cryptoasset to date has been “any cryptographically secured digital representation of value or contractual rights that: (a) can be transferred, stored or traded electronically; and (b) that uses technology supporting the recording or storage of data (which may include distributed ledger technology).”

This definition has been treated as a basis for a legal and regulatory analysis of cryptoassets in Scotland but does not clearly indicate how such assets are to be treated in Scots private law. By clarifying the framework for digital assets, the Bill will increase confidence for FinTech firms to develop new tokenised financial products, such as stablecoins and asset-backed securities.

The Bill seeks to provide legal foundations for cryptoasset ownership and transfers, where the legal status of assets has traditionally been perceived as an uncertain. The government hopes that this change will help Scotland to remain an attractive destination for FinTech and will give consumers the confidence to invest in digital assets.

Individuals

While HMRC guidance has been issued on cryptoassets, there has been a notable absence of practical direction within inheritance tax (IHT) manuals, meaning estate practitioners have been faced with issues regarding locating, accessing and valuing a deceased’s digital assets.

The technology neutral definition of a digital asset allows digital assets to be identified for IHT purposes. By codifying legal ownership, the Bill provides executors with a clear basis to determine a deceased’s ownership of an asset. This will give executors more certainty as to the taxable nature of digital assets, and how to classify them within IHT accounts.

The Bill confirms that possession of login credentials by a third party does not amount to ownership, overcoming a key ambiguity in many estates where a third party holds passwords for a digital asset. Whilst access issues, such as lost passwords, still result in assets becoming unrecoverable, the framework would provide some guidance for courts in situations where third party agents hold login credentials.

If you would like to discuss how the Digital Assets (Scotland) Bill could impact you or your organisation, please get in touch.

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