The Digital Assets (Scotland) Bill would clarify that certain digital assets are things which can be owned. This briefing looks at key scrutiny issues in advance of Stage 3, including around what is captured by the definition, application of the Bill in practice and the concepts of control and exclusive control.
This briefing looks at consideration of the Digital Assets (Scotland) Bill prior to Stage 3
The Bill would provide a legal framework to recognise certain digital assets as things which can be owned in Scots law. The Bill would define the type of digital assets to which it applies, as well as making provision for the acquisition and transfer of these digital assets.
The Scottish Government's intention is that creating legal certainty about the status of digital assets will support innovation and economic development in Scotland.
The key issues going into Stage 3 are:
whether the definition of digital assets in the Bill is flexible enough to be future-proofed while not capturing assets which would be better regulated in other ways
how guidance and expert advice can be provided to ensure that the Bill can be understood by those working with digital assets, and the law can be supported to develop in a coherent way
whether the protection in the Bill for someone who acquires digital assets in good faith and for value balances competing interests effectively
the role of the concepts of control and exclusive control (as defined in the Bill) in practice.
The Digital Assets (Scotland) Bill is a Scottish Government bill. It was introduced in the Scottish Parliament on 30 September 2025.
Key documents relating to the Bill, and to its scrutiny by the Scottish Parliament, are available on the Digital Assets (Scotland) Bill page on the Scottish Parliament's website. These include:
the Bill as introduced1
the Policy Memorandum3
the Explanatory Notes4.
The SPICe briefing on the Bill5 provides more detailed consideration of its proposals and policy context.
Dr MacPherson and Professor Yüksel Ripley also produced a research briefing on Digital Assets in Scots Law6 as part of a SPICe fellowship. Their briefing looks at the approach to digital assets in some other jurisdictions; current issues with the treatment of digital assets in Scots law; and the Scottish Government's consultation on reform proposals in this area.
The Bill would only apply to a specifically defined category of digital asset
There is no agreed meaning to the term digital assets. It could be used to cover a wide range of digital items - from bitcoin to image files or in-game rewards.
However, the Bill would only apply to a sub-category of this group, commonly described as cryptoassets. To be caught by the Bill, a digital asset must:
arise from an electronic system which makes it rivalrous - rivalrousness means that the use or consumption of the asset by one person limits its use or consumption by another
exist separately from the legal system - assets which exist only because of particular legal rights (for instance, intellectual property or contract) are more appropriately recognised in other ways under Scots law.
In order to support rivalrousness, the electronic system behind a digital asset must make an immutable record of transactions. This has the effect of ensuring that the asset can only be used or spent once.
It would remain possible for other types of digital asset to be recognised as things which can be owned
The Bill would not necessarily stop other digital items - outwith the definition - being recognised as things which could be owned. This could happen through the process of the courts applying the general principles of the common law. The common law is the traditional law as developed by judges through their decisions in individual court cases.
The Digital Assets (Scotland) Bill aims to clarify that certain digital assets are recognised as things which can be owned in Scots law.
Property categories in Scots law
Scots law recognised four categories of property, as discussed in the SPICe Bill briefing1. Heritable property is land and buildings and some related rights, with moveable property being everything else. These categories are further divided into corporeal property, being property with a physical existence, and incorporeal property, being everything else.
Provisions in the Bill
The Bill sets out:
a definition for the digital assets to which the Bill would apply - which requires that the assets are rivalrous, exist separately from the legal system and arise from an electronic system which creates an immutable record of transactions
that such digital assets are to be treated as incorporeal moveable property for the purposes of Scots law generally, but as corporeal moveable property for the purposes of acquisition and transfer
the concepts of control and exclusive control as key to acquisition and transfer -someone who has control would be presumed to have exclusive control (unless it can be shown otherwise). And someone who has exclusive control would be presumed to own the asset (unless it can be shown otherwise).
Note that the Scottish Government has announced its intention to amend the requirements around control by removing the need for exclusive control.
The following concepts underpin the development of digital assets:
Blockchain - the primary current technology for creating an immutable record of digital transactions, which then makes them rivalrous. Blockchain is a type of distributed ledger technology which records and stores transaction data in encrypted blocks which are joined together chronologically.
Consensus mechanism - the way in which consensus is reached when distributed ledger technology is used to enable a number of different computer networks to participate in a system. There are different types of consensus mechanism, with proof of work and proof of stake being the main ones for blockchain1.
Cryptoasset - a digital representation of an asset backed by cryptographic processes such as blockchain. Common examples of cryptoassets are digital tokens signifying ownership of digital art, such as Bored Ape Yacht Club images, and digital tokens which give you access to particular services or perks, such as a fan club.
Cryptocurrency - a digital representation of currency, issued privately rather than by a bank or government and backed by cryptographic processes such as blockchain. Bitcoin and Ether are examples of cryptocurrencies.
Cryptography - using mathematical processes to encrypt data to prevent unauthorised access. Cryptography is used to generate blockchain and to secure blockchain-based transactions.
Distributed ledger technology - a computing concept that involves sharing data records across different computers in the system. This enables people to participate independently in the system and transact peer-to-peer without the need for central control (described as decentralisation). Distributed ledger technology can be used to create a synchronised record of digital transactions because the computers on the network agree to make changes via a consensus mechanism.
Hashing - a cryptography process used to make blockchain secure. Data is converted into a hash (a unique string of text with a fixed length). The process cannot be reversed, creating an immutable record. And any minor alternations to the data will result in a different output, making it easy to detect unauthorised changes.
Non-fungible token - a non-fungible item is unique, so that it cannot be easily replaced by a similar thing. Money and apples are usually fungible, whereas a painting by Picasso is non-fungible. A non-fungible token is a digital representation of ownership rights to a non-fungible item, stored electronically in a way which makes them rivalrous.
Public key cryptography – a system for securing digital assets. It involves encrypting data using a public key that is unique to the user but can be seen by anyone else. However, it can only be decrypted by a related private key. The private key code is designed to be virtually impossible to crack. For example, cryptocurrency can be transferred to an address created by a public key for payment, but only the person with the related private key can access the assets transferred.
Tokenisation - this is the concept of representing real-world assets with digital tokens. It has many applications. For example, company shares could be tokenised, so that trading the token was the direct equivalent to trading the share. Land purchase could be tokenised, so that many people could own a small part of an asset they wouldn't otherwise be able to purchase. Farm produce could be tokenised, so that it could be tracked using blockchain as it is transferred around the world, improving traceability and supply chain efficiency. However, there are a range of issues which may impact on the effectiveness in law of tokenisation in Scotland.
The Economy and Fair Work Committee was responsible for Stage 1 scrutiny
The Committee conducted a call for views and heard oral evidence over four Committee meetings. These covered:
26 November 20251- Lord Hodge and Professor Fox, members of the Scottish Government's Expert Reference Group on digital assets and Scots private law
3 December 20252- legal experts and business/academic experts
10 December 20253- consideration of the wider impact of recognising digital assets as property
17 December 20254- the Minister for Business and Employment, Richard Lochhead MSP.
The Committee published its Stage 1 Report5 on 15 January 2026. The Scottish Government issued a holding response on 21 January 2026, then a full response on 30 January 2026.
The Stage 1 debate took place on 22 January 2026. Key themes were:
the growing importance of digital assets to people and businesses
discussion of the main pillars of the definition of digital assets set out in the Bill
the need for guidance from the Scottish Government to tease out how some of the concepts in the Bill can be applied in practice
the need for further legislation - and regulation - in relation to digital assets.
The general principles of the Bill were agreed to at Stage 1 without division.
The Economy and Fair Work Committee considered Stage 2 amendments at its meeting on 18 February 20261.
This briefing does not cover all issues identified by the Committee. Instead, it focusses on the main issues highlighted in the Stage 1 Report and how they were dealt with at Stage 2.
Key issues were:
how digital assets would be defined and, in particular, how to ensure the definition was flexible enough to cover future technological developments but not so wide as to capture things which would be better regulated in other ways
how to bridge the gap between law and technology - so that technologists understood how the law applied and the law was able to deal with new technological innovations
good faith acquisition protections - whether the protection in the Bill for someone who acquires digital assets in good faith and for value balanced competing interests effectively.
The Scottish Government has written to the Economy and Fair Work Committee highlighting its intention to amend the provisions in the Bill dealing with control and exclusive control at Stage 32. These are discussed in the section dealing with exclusive control.
In its Stage 1 evidence-taking, the Committee heard concerns about both the specific definition used in the Bill and about digital items which may be captured by the definition but arguably shouldn't be.
The Committee heard a range of views about the suitability of the definition and alternative approaches. It concluded that it supported the approach of the Scottish Government but flagged several issues for further consideration by the Scottish Government. These were
The Bill would require a digital item to arise from an electronic system which keeps an immutable record for it to meet the definition of digital assets. There was debate around the appropriateness of this requirement.
A key concern of stakeholders was that it might prevent digital items being recognised as digital assets under the Bill because a system allowed changes to be made in limited circumstances, such as because of fraud or error.
Professor Fox argued that the courts would likely take a purposive approach to interpretation, covering systems which allowed limited changes in pre-agreed circumstances1. However, other stakeholders thought that immutability implied that a record could not be changed. Academics from Aberdeen University suggested that requiring "integrity of records" might be a better way to address this issue2.
Stage 1 recommendations
The Committee recommended that the Scottish Government monitored developments in this area.
Stage 2 consideration
There were no amendments at Stage 2 which addressed this issue.
Stakeholders raised concerns that the Bill might capture some digital things which were already subject to separate legal regimes, or should not be given property status without further consideration.
The potential for conflicting regulation
Some types of potential digital asset were already subject to separate legal frameworks, creating the potential for conflicts in the way the law applies to them. Examples of this type of asset are:
electronic trade documents - documents used in trade and transportation of goods, sometimes as proxies for ownership, governed by the Electronic Trade Documents Act 2023
shares traded on the CREST system (the Certificateless Registry for Electronic Share Transfer).
There are human rights implications to giving something property status
Giving an item property status engages Article 1, Protocol 1 (A1P1) of the European Convention on Human Rights, guaranteeing "peaceful enjoyment" to owners. This may make future regulation more difficult.
Professor Robbie highlighted issues with some types of voluntary carbon credits. She saw these as an example of things that may be able to meet the definition of digital asset but should not be given property status without due consideration to the impact of this1.
Stage 1 recommendations
The Committee recommended that the Scottish Government give consideration to whether there were some potential digital assets which should be excluded from the ambit of the Bill.
It also recommended that the Scottish Government undertake a cross-sectoral review of current digital asset activity to identify where the Bill may have unintended consequences.
Stage 2 amendments
| Purpose of amendment | Result |
|---|---|
| Scottish Government amendment 1 would remove electronic trade documents from the scope of the Bill | Amendment 1 was agreed to without division |
| Scottish Government amendments 2 and 4 would make clear that the requirements of the Bill were subject to any other legislative provision, regardless of when that legislation was passed. This would make it easier to ensure that digital assets could be excluded from the Bill's requirements where appropriate. | Amendments 2 and 4 were agreed to without division. |
Providing clarity for technologists
The Economy and Fair Work Committee supported the Scottish Government's property law approach to defining digital assets as the best way of future proofing the definition. However, several stakeholders noted that the terminology and approach would not be familiar to those working in the sector. This may make it difficult for those working with digital assets to ensure that the law applied to them in the way they expected.
Stage 1 recommendations
The Committee recommended that the Scottish Government work with the sector to produce guidance on how the concepts in the Bill would apply in practice. It also called on the Scottish Government to set out its views on which current digital technologies would meet the definitions in the Bill.
Stage 2 amendments
There were no Stage 2 amendments addressing this issue.
Ensuring the courts have access to advice on the latest technological developments
Some stakeholders highlighted that the courts would need to apply the law to technological developments which may not obviously fit with the Bill's definitions. It would be helpful for them, and others working in the sector, to have access to expert advice and guidance to support them in this task.
Some witnesses highlighted the work of the UK Jurisdiction Taskforce in this area and suggested that its guidance could provide the necessary context. However, others noted that the UK Jurisdiction Taskforce had no official role and was unlikely to take the peculiarities of Scots law into account.
Stage 1 recommendations
The Committee recommended that the Scottish Government work to ensure Scottish representation on the UK Jurisdiction Taskforce, as well as any other expert panel which may be established. It also recommended that the Scottish Government set up a Scottish panel of experts to advise the courts, businesses and the legal sector in this area.
Stage 2 amendments
There were no Stage 2 amendments which addressed these issues.
The Bill would allow someone who acquired a digital asset (as defined in the Bill) in good faith and for value to become its owner, even if the person they bought it from was not. This would enable digital assets to be traded with confidence.
This is contrary to the standard position in Scots law, where someone cannot pass on a better ownership right than they themselves have. In practice, this means that an original owner can usually recover something which has been stolen from whoever is in possession of it. However, it does reflect the approach to some types of transfer, including bills of exchange (for example, bank notes).
Some stakeholders raised concerns about the impact good faith acquirer protection could have in a sector where fraud and theft are already serious concerns. Some suggested alternative approaches, including further defining good faith to place additional requirements on a purchaser - for example, undertaking due diligence or using recognised trading platforms.
Stage 1 recommendations
The Economy and Fair Work Committee supported the Scottish Government's approach to protecting acquirers in good faith. However, it noted that good faith in relation to digital assets may be more complicated than in other areas. It called on the Scottish Government to keep this issue under review.
Stage 2 amendments
The Scottish Government amended the good faith provisions in the Bill at Stage 2 (amendment 3, in the name of Richard Lochhead MSP). However, the purpose of the amendment was to re-state the original provision with greater clarity, rather than to address wider issues. The Minister for Business and Employment, Richard Lochhead MSP, stated that the Scottish Government did not intend to table any further amendments on this subject (col 4)1.
The Scottish Government has written to the Economy and Fair Work Committee1 to highlight its intention to bring forward amendments to remove the provisions in the Bill dealing with exclusive control at Stage 3.
Exclusive control as a proxy for possession
The Bill would use exclusive control of a digital asset as the equivalent of possession of corporeal moveable property (such as apples or cars). Section 5 would require that someone who can initiate the transfer (or, where that is not possible, the disposal) of an asset is presumed to control it.
Someone who has control of an asset would be presumed to have exclusive control. And someone who has exclusive control would be presumed to own the asset. Both presumptions could be rebutted by presenting evidence to the contrary.
Control in practice
Several stakeholders noted that control of digital assets is often shared, including with people who are not owners. Some questioned whether the approach in the Bill reflected how digital assets operated in practice.
Stage 1 recommendations
The Committee suggested that the Scottish Government addressed difficulties in applying the concepts in practice via guidance.
Stage 3 amendments
The Scottish Government intends to amend the Bill to remove the concept of exclusive control. It now believes that demonstrating control, as defined in the Bill, is more closely aligned with possession for corporeal moveable property.