His story is more than just a cautionary tale, it’s a clear reminder that our legal systems are still struggling to keep pace with the complexities of the digital age.
Digital assets are no longer niche
Digital assets are becoming an increasingly routine part of everyday life - a trend recently underscored by Lomond School in Helensburgh, which has become the first UK private school to accept tuition payments in Bitcoin. It’s a bold move that signals where we may be heading, but it also brings the legal uncertainty around digital payments into sharper focus. What happens if a transaction fails? What recourse is available in cases of fraud? And how should these assets be valued for tax purposes or financial aid assessments?
At present, Scotland’s legal system isn’t set up to answer these questions. If we want to build a digital economy that is both dynamic and secure, we need a legal framework that provides clear definitions and enforceable rights. People and organisations need to know where they stand – whether they’re paying school fees or managing a digital asset portfolio.
As of now, Scottish property law is built around concepts developed for tangible goods and traditional financial instruments. Digital assets are fundamentally different. They are decentralised, intangible and often exist across international networks with no central authority. That creates real legal complications, particularly when it comes to ownership, loss or succession.
A pivotal moment for reform
That gap has recently been acknowledged by the Scottish Government, which has now completed a consultation on the legal status of digital assets. The consultation marks a pivotal moment. It sought views on whether and how digital assets - including cryptocurrencies, Non-Fungible Token (NFTs) and other non-physical property - should be formally recognised within our legal framework.
Legal recognition of digital assets as a distinct category of personal property would be an important starting point. This would help resolve questions around who owns a digital asset and how ownership can be proven and transferred. However, legal clarity must go further. Scotland could adopt a statutory definition of a “digital object” or “crypto-token,” similar to steps already taken in jurisdictions like Singapore and Liechtenstein.
We also need practical legal mechanisms for recovering lost or stolen digital assets which might mean adapting existing remedies, such as orders for delivery or declarators of ownership, or even developing new, digital-first processes for asset tracing and recovery. For businesses and consumers, this would offer vital confidence that their digital property can be protected through the courts.
Scotland’s opportunity to lead
The good news is that Scotland doesn’t need to begin from scratch. Legal developments in England, the EU and other jurisdictions already offer useful models to draw from, providing a strong foundation for reform. But Scotland has the chance to do more than follow – to lead by designing a legal infrastructure that is not only robust and responsive but also internationally credible and reflective of the fast-evolving nature of digital assets.
With a long-standing legal tradition, a digitally literate professional community and a tech sector that is both ambitious and deeply invested in the future of innovation, Scotland is well placed to shape a legal framework that gives businesses and individuals the confidence they need to participate fully and securely in a digital economy.
James Howells’ story may sound extreme, but the risks it highlights are becoming increasingly familiar. As digital assets become a normal part of how we pay, invest and create value, we cannot rely on outdated legal assumptions to govern them. The Scottish Government’s consultation is a first step in the right direction. But for Scotland to realise the full potential of its digital economy, the law needs to evolve and it needs to do so urgently.
This article was originally published in DIGIT News.
