Xcode 12.5 beta 3 seems to have resolved this issue.

I made just a couple of changes to the plist to get your sample to work: For the plist, my new fragment looks like this: <key>UTExportedTypeDeclarations</key> <array> <dict> <key>UTTypeConformsTo</key> <array> <string>public.data</string> </array> <key>UTTypeIdentifier</key> <string>com.devian.sampleapp.customstring.dragdroptype</string> </dict> </array> And that's it, your code unmodified works now.

Confirming that this is still an issue in Xcode 13.0 beta 3.