As cryptocurrencies, non-fungible tokens (NFTs), and other digital assets have grown in popularity, questions have arisen concerning how these intangible digital assets should be handled under the Uniform Commercial Code (UCC). According to a recent article by Ropes & Gray[1], some of the key questions include whether cryptocurrencies constitute ‘money’, how to perfect a security interest in virtual currency, and how to insulate purchases of digital assets from adverse claims.

In 2019, the Uniform Law Commission (ULC) and the American Law Institute (ALI) created the Emerging Technologies Committee (ETC) to analyze changes need to modernize the UCC. Members of ETC have teamed up with lawyers who focus on UCC matters and digital technologies, to draft amendments to resolve unanswered questions pertaining to the purchase and sale of intangible digital assets.

Below is a summary of the proposed changes, and we have provided a list of source articles in the footnotes if you would like more in depth information.

Changes and Enhancements to Articles

In their draft of amendments, ETC members propose to address the advancement of digital assets by making changes to existing UCC articles and introducing a new article (Article 12).

The amendments proposed by the committee center around a class of digital assets defined as “controllable electronic records” (“CERs”)—which include virtual non-fiat currencies (cryptocurrencies), non-fungible tokens, and other digital assets in which specified payment rights are embedded. According to a recent article in Business Law Today, “The amendments provide for a CER to be in effect negotiable, i.e., capable of being transferred in such a way as to cut off competing property claims (including security interests) to the CER (a “take-free” rule).”[2]

UCC Article 9 currently only allows for a security interest in money to be perfected by possession. Since electronic money cannot be ‘possessed’ the proposed amendment states that ‘a person has control of ‘electronic money’ (e.g. cryptocurrency) when the electronic money confers an exclusive benefit or transfer control to its owner, and the electronic money is readily identifiable (i.e. with a number, key, account number, etc.).[3]

Members of the committee revised the definition of “Chattel paper” in Article 9 by making the definition clearly state that the “chattel paper is intended to capture the right to payment secured by or with respect to the lease of specific goods, and not the record evidencing that right (e.g. the secured note, lease or conditional sales agreement).” This was achieved by changing “record or records evidencing a monetary obligation” to “a right to payment of a monetary obligation.”[4]

Another revision to Article 9 was made to clarify “if and when a lease that involves both the provision of goods and something else, such as services or other property, will still constitute chattel paper for Article 9.”

What’s Next

It is important to remember that UCC amendments address state commercial laws only. The UCC does not affect federal laws, such as securities laws or anti-money laundering laws. And some states have already taken steps to implement non-uniform amendments regarding digital assets to their respective UCC which may increase confusion. Given the complexity of the UCC landscape, interested parties will need to stay up-to-speed as law and regulations evolve.

Working With a UCC Team

Currently, these are proposed changes and they have not been finalized yet. The Committee is looking to obtain approval from the American Law Institute and the Uniform Law Commission. Once approval is granted the amendments would then be offered for enactment by the states.  If you have any questions about emerging technologies in the UCC industry, our team of experts are available to help.


[1] Ropes & Gray Amendments to UCC on the Horizon Affecting Purchase and Sale of Digital Assets | Ropes & Gray LLP (

[2] The Proposed 2022 Amendments to the Uniform Commercial Code: Digital Assets – Business Law Today from ABA

[3] U.C.C. § 9-105A (Unif. L. Comm’n & Emerging Technologies Draft, Mar. 21, 2022) (control of electronic money)

[4] The UCC Emerging Technologies Committee: Part II (Chattel Paper)

Proposed UCC Amendments Regarding Digital Assets
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