THE LEGAL STATUS OF VIRTUAL PROPERTY OWNERSHIP, POSSESSION AND TRANSFERABILITY IN THE METAVERSE

The development of the Metaverse has introduced new forms of digital assets, including virtual land, avatars, digital clothing, collectibles, artwork and non-fungible tokens (NFTs). These assets can possess considerable economic value and may be bought, sold or transferred between users. However, their legal status remains uncertain. The central difficulty is determining whether a person who purchases a virtual asset actually owns it or merely receives a contractual licence to use it. Traditional property law is primarily based on concepts developed for physical objects and recognised intangible rights, whereas virtual property operates through software, blockchain technology, platform rules and contractual arrangements. Existing scholarship presents different approaches: some scholars favour contractual regulation, while others argue that certain digital assets should receive recognition as property. Recent developments in the United Kingdom have strengthened the latter approach by recognising that some digital assets can attract property rights. India, although recognising virtual digital assets for taxation purposes, does not yet have a comprehensive framework governing ownership, possession and transfer of virtual property. This paper examines these issues and argues that the law should distinguish between ownership of a digital token, rights in the underlying digital content and contractual rights granted by a platform.