In recent decades, digital assets, including cryptocurrencies and other blockchain-based assets, have become increasingly prevalent and complex. However, there are challenges fitting them into Scotland’s legal framework, with limited legal authority currently available to address the unique characteristics of these assets.

Written by Dr Alisdair MacPherson and Professor Burcu Yüksel Ripley, who were both recently appointed under the Scottish Parliament’s Academic Fellowship Scheme, the newly released Scottish Parliament Information Centre (SPICe) briefing provides essential background and terminology to help MSPs, legal professionals, policymakers and the public better understand digital assets in the context of Scots law.

It examines the technologies underpinning digital assets, outlines how these assets are defined in the UK and internationally, and highlights reform developments in other countries, including England and Wales.

A key focus of the briefing is how the current law in Scotland applies to digital assets in a variety of areas. While existing legal principles and rules offer some coverage, the authors identify significant uncertainties – especially in relation to aspects of property law, debt enforcement, insolvency, civil procedure, and private international law.

The briefing also analyses the Scottish Government’s recent Consultation on Digital Assets in Scots Private Law (2024-2025), which is expected to inform a forthcoming bill. These proposals aim to clarify the legal status of digital assets in Scots law, with particular emphasis on property law, including definitions, ownership and transfer mechanisms.

However, the authors note that several complex areas, such as enforcement and insolvency, are unlikely to be addressed in the initial legislation, leaving open questions about future reform.

Dr MacPherson said: “Since their emergence, digital assets have grown in significance. While some of them are controversial, there are various types of digital assets with different features. They are widespread, frequently valuable and used for commercial transactions.

“Understandably, legal systems are having to adjust to their existence. Scots law can accommodate them to a degree, but there is an absence of legal authority. The anticipated legislation will therefore help to provide greater clarity and certainty for anyone dealing with digital assets. It will hopefully resolve a number of issues, but further reform will be needed.”

Professor Yüksel Ripley added: “Our research in digital assets will contribute to informing debate and scrutiny of the expected legislation within the Scottish Parliament, and help to shape future legal developments concerning digital assets.”

The briefing is available now on the Scottish Parliament website.