In a report out today, the Economy and Fair Work Committee recommends the Scottish Parliament agrees the general principles of the Digital Assets (Scotland) Bill. The Bill has been introduced to provide legal certainty for those who use digital assets, which could support ongoing innovation and investment in the financial and technology sectors.

While recognising this purpose and how the Scottish Government intends to secure legal recognition for digital assets, the Committee notes that this is a rapidly evolving area and anticipates that further legislation will be required.

In recent decades, the use and importance of digital assets – such as cryptocurrencies and non-fungible tokens – has become widespread, as businesses and individuals explore their potential high rewards. However, digital assets do not fit neatly into the existing categories of property under Scots private law.

To bring clarity to the legal profession and users of digital assets in Scotland about how ownership of digital assets can be established, the Bill proposes that a defined selection of digital assets can be recognised as incorporeal (non-physical) moveable property.

Digital assets must be “rivalrous” – where one person’s use prevents another from using the same asset – and must exist independently of the legal system so they can be treated as a distinct category of property under the Bill. This would make them separate from other types of non-physical ‘property’ that can be enforced by courts, like legal rights.

After considering all the views it heard, the Committee accepts that these requirements are sufficiently clear to provide a framework for lawyers and industry to work with in the event of disputes around digital property rights.

Economy and Fair Work Convener, Daniel Johnson MSP, said: “In recent decades, digital assets have increasingly become part of our economy.

“Blockchain technology, which enforces the idea of ‘rivalrousness’, is reshaping how we think about digital assets as a form of property. However, the lack of legal certainty around ownership can create problems for businesses and individuals, stifling investment and innovation.

“While the Committee acknowledges the different views of those who gave evidence, it notes that the Bill aims to provide much-needed clarity which could open up new economic opportunities in Scotland.”

As well as ownership, the Bill is also designed to incorporate how digital assets are acquired and transferred into Scots law.

The Committee notes that the Bill treats digital assets as corporeal moveable property (which has a physical existence) for acquisition and transfer, and accepts the concept that an established owner having exclusive control of a certain digital asset is equivalent to physically possessing a thing.

Following concerns raised in evidence that this may be at odds with what happens in practice, the Committee recommends that this issue be addressed within broader guidance developed by the Scottish Government in collaboration with industry, academia and relevant public sector stakeholders. This guidance should clarify how the definition of digital assets applies across different technologies, ensuring it meets the needs of businesses and innovators while keeping pace with rapid technological change.

The convener continued: “Clarity around the legal status of digital assets such as cryptocurrencies, digital art and digital tokens should mean greater confidence in using digital assets for trade and investment, more opportunities for innovation and protection for people who have digital assets transferred to them in good faith.

“Our Committee is therefore in agreement that the Scottish Parliament should support the general principles of the Bill.”