Amendments to the US commercial code exclude crypto from electronic money category
The Union Law Commission prescribed all states to enact the new amendments to boost the growth of the digital economy
By Shashank Bhardwaj
The Uniform Commercial Code (UCC) was amended by a joint committee of the United States’ Uniform Law Commission (ULC) and the American Law Institute (ALI). The new amendments will address the peculiarities and nuances of digital asset transactions, as well as the regulation of crypto-as-collateral secured financings.
Prior to the amendments, secured creditors faced difficult perfection issues under UCC Article 9 in connection with liens in crypto, other digital assets, and electronic contract rights. It was primarily affecting contracts in which the secured creditor has exclusive electronic access and other rights in connection with its lien. Due to a lack of clarity and uniformity, the myriad of unresolved legal questions hampered the growth of the digital economy.
The new amendments include the introduction of ‘controllable electronic records’ (CERs). It will cover not only existing blockchain-backed assets but also all future types of digital assets. A controllable electronic record is a ‘record stored in an electronic medium.’ They will include crypto assets as well as nonfungible tokens (NFTs).