Work is nearing completion on proposed amendments to the Uniform Commercial Code (“UCC”) to address a limited set of transactions largely involvin

The Proposed 2022 Amendments to the Uniform Commercial Code: Digital Assets

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2022-06-22 10:00:07

Work is nearing completion on proposed amendments to the Uniform Commercial Code (“UCC”) to address a limited set of transactions largely involving emerging technologies, such as virtual (non-fiat) currencies, distributed ledger technologies, and, to a limited extent, artificial intelligence. The principal amendments address so-called digital assets. The rules covering transfers of covered digital assets, including security interests in those assets, are carefully coordinated so that the transactions generate predictable and consistent results.

Since 2019, a Committee appointed by the American Law Institute and the Uniform Law Commission, the sponsoring organizations of the UCC, has been considering and formulating amendments to the UCC to address emerging technological developments. The Committee has included and worked with both lawyers experienced in UCC matters and lawyers whose practices concentrate on digital assets. The work of the Committee has benefitted enormously from the contributions of American Bar Association advisors and more than 300 observers from academia, trade groups, government agencies, law firms, private technology companies, and foreign participants from multinational law reform organizations or who are active in technology-related law reform efforts in their respective countries.

The Committee presented its initial draft of the amendments to the Uniform Law Commission at the Commission’s annual meeting in July of 2021. The ALI Members Consultative Group (“MCG”) met and discussed the draft in October 2021. A revised draft was considered and approved by the American Law Institute Council in January of 2022. The MCG will meet again and consider the latest draft late in April. The Council of the American Law Institute approved the amendments at the Council’s meeting in January 2022. The Committee hopes to obtain approval of the members of the American Law Institute at the Institute’s Annual Meeting in May of 2022, and of the Uniform Law Commission at the Commission’s Annual Meeting in July of 2022. The amendments would then be offered for enactment by the states.

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