Meeting of the Parliament 22 January 2026 [Draft]
I join the convener, whom we have just heard from, in thanking all those who gave evidence to the committee, the Scottish Parliament information centre for its advice to our clerking team, and my fellow committee members for agreeing unanimously on what was a very consensual report.
As the only lawyer on the committee, I was occasionally turned to for advice, which I was ill equipped to provide. [Laughter.] In that respect, I declare my interest as a member of the Law Society of Scotland, although I am not currently practising.
It was a particular privilege to be able to take evidence in committee from Lord Patrick Hodge, who is the deputy president of the Supreme Court and one of the most able Scots lawyers of the current generation. We are very grateful for his insights. My colleague Michelle Thomson, who I do not think is in the chamber this afternoon, joined me in admiring Lord Hodge’s contribution.
We have heard from the convener a fair summary of the key issues that are addressed in the bill. We start by asking what exactly a digital asset is. Section 1 of the bill describes it as
“a thing that … arises from an electronic system that makes it rivalrous, and … exists independently from the legal system.”
I am not sure that that provides a great deal of clarity for the person in the street, so it might be easier to give some examples. A cryptocurrency is a digital asset—it does not exist in any physical form, but it exists nonetheless, has value and is tradable. It is also supported by an electronic system. Into the same category might fit non-fungible tokens, which members of the gaming community will be very familiar with. What does it mean to be “rivalrous”? Something is rivalrous if only one person can use or consume it at one time, so a digital asset is deemed rivalrous because only one person can possess it at once.
The bill is necessary simply because Scots law, as it exists currently, does not properly recognise digital assets as property, or at least it does not properly define them. As the minister said, it is important that the law of Scotland keeps up to date with changes in technology and provides an appropriate legal framework for those who own, possess and trade in digital assets. As we have heard, the bill classifies digital assets as incorporeal movable property—that is, property that is not attached to land and that does not have a physical existence.
Section 1 of the bill goes on to state that, in order to make a digital asset rivalrous, there must be an
“immutable record of transactions”,
which means that there must be a system of recording who owns that asset at any particular time.
Sections 3 and 5 of the bill deal with the presumption of ownership. It is presumed that somebody who has exclusive control of a digital asset owns it. In that respect, as Professor David Fox said in his evidence to the committee, the bill goes further than the existing UK legislation in providing a definition of control. That is necessary because it is not expected that there will be a high level of litigation in the Scottish courts, and therefore there is a need to be more prescriptive for the benefit of the Scottish judiciary.
An important aspect of the bill is that it provides a legal framework for transacting with digital assets, classifying them as incorporeal movables generally but treating them as corporeal for the purposes of acquisition and transfer.
That leads us to one of the most interesting aspects of the bill—at least for me—which is the question of protection for the acquirer of a digital asset in good faith. The bill sets out that somebody who acquires a digital asset
“in good faith and for value”
becomes the owner of that asset even if the person selling to them was acting dishonestly.