One aspect of business that is governed by the Uniform Commercial Code (the “UCC”) is secured transactions involving personal property. A good example of such a transaction is the bank loan the repayment of which is secured by a security interest in inventory, equipment, supplies, work in process, and general intangibles, etc. The UCC defines general intangibles as any personal property other than certain types of personal property such as deposit accounts, investment property, goods, letter of credit rights, letters of credit, and money. The term also includes payment intangibles. A payment intangible means a general intangible under which an account debtor’s principal obligation is a monetary obligation.
Currently, digital assets, including cryptocurrency, are classified as general intangibles under the UCC. However, the current version of the UCC does not adequately address the secured transactions and transfer issues raised by digital assets. Some states have enacted laws to address these issues, but those laws could make the “Uniform” Commercial Code non-uniform. The Uniform Law Commission has approved various amendments to the UCC to address digital assets such as virtual currencies, electronic money, and nonfungible tokens. Some of the amendments would be new provisions and would appear in a new chapter of the UCC, some of the amendments would be made to existing provisions of the UCC. These amendments will be submitted to state legislatures for consideration in 2023.
If you need assistance with business matters, contact Per Oscarsson or one of the other attorneys in Beresford Booth’s Business and Real Estate Group at email@example.com or by phone at (425) 776-4100.