Between 27 November 2024 and 5 February 2025, the Scottish Government ran a consultation on “Digital assets in Scots private law”. The authors submitted a response to the consultation which is available here.

The government’s analysis of the responses, published in May 2025 and available here, confirms general support of its aims from a broad range of stakeholders including academics, legal practitioners, financial service providers and those working in fintech.

Differences of opinion are evident, for instance around the precise characteristics of a digital asset for the purposes of Scots law – this is to be expected and should be welcomed. Being able to compare and contrast differing responses will provide policymakers with valuable material for consideration as they process the feedback.

Despite the range of views expressed by respondents, however, it should be noted that stakeholders from the legal and finance sectors “overwhelmingly supported” the use of primary legislation to clarify Scots law in this area. The authors form part of this support. The challenge for Scotland as a legal jurisdiction is that there have not been (and there is not expected to be) enough cases going through the courts in Scotland to rely on the common law for organic legal development at a pace acceptable for a rapidly developing area such as this.

This contrasts with larger jurisdictions such as England and Wales and still, notwithstanding this, the Property (Digital Assets etc) Bill (which clarifies the status of digital assets under English law) is currently making its way through the UK parliament.

It is notable that even in a jurisdiction with such a strong tradition of judicial innovation, England and Wales have moved to implement digital assets legislation for clarificatory purposes.

With that said, Scottish judges and case law will undoubtedly play an invaluable part in developing our law. It is not unreasonable to assume that more relevant cases will arise as the market develops. However, a jurisdiction the size of Scotland will never have the same potential for the scale of judicial innovation as its southern neighbours.

The opportunity now presents itself for the Scottish Government to introduce legislation which definitively confirms the legal status of digital assets in Scots law. The courts can then play the crucial role of interpreting how this new asset class fits with existing legal principles (with commentary from legal academics and practitioners supplementing this). If it would not result in unreasonable delay to the legislative timeline, it would also be open for the Scottish Government to address ancillary issues in any “Digital Assets (Scotland) Act” (or similar).

For instance, it could be made clear that a Scottish digital asset can be the subject of a statutory pledge – a new security right created under the Moveable Transactions (Scotland) Act 2023, which came into full force earlier this year.

Taking into account the technology advancements occurring daily, initial legislation will never be able to cover all foreseeable issues. However, while any legislative process should be thoughtful and consider a wide range of views, the need to get legislation on the statute books in a timely manner should not be understated.

From the authors’ perspective, the recognition of digital assets in Scots law will give confidence to market participants (and their legal advisors).

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We are of the opinion that Scots property law already contains the appropriate class of property which can encompass digital assets (known as “incorporeal moveable” property) – what is required is a legislative statement defining the characteristics of digital assets as a distinct sub-category.

Once legislative recognition has been achieved, legal advisors can issue clean opinions and provide clear advice to clients, which may provide sufficient comfort for said clients to approve new projects which would previously not have gone ahead due to the legal uncertainty around (for instance) tokenisation of shares in a Scottish company or Scottish debt instruments.

Scotland must remain a competitive and attractive place for investment and innovation with at least the same opportunities as in other jurisdictions, and Scottish digital assets legislation can play its part.