History of the 2022 UCC Amendments So Far In 2019, the Uniform Law Commission and The American Law Institute appointed a joint committee to consider the need for changes to the Uniform Commercial Code (UCC) to accommodate certain emerging technologies, including artificial intelligence and distributed ledger or “blockchain” technology. The joint committee’s meetings culminated, in July 2022, with the approval of the Uniform Commercial Code Amendments (2022) that the Uniform Law Commission recommended for adoption and enactment in all U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. In June 2023, Hawaii became the first jurisdiction to enact the amendments, followed by Indiana, North Dakota, Colorado, Delaware, Nevada, and New Hampshire, which all enacted in 2023. Though not yet universally adopted, 32 jurisdictions have revised their laws to incorporate the amendments’ changes as of August 2025, while six more have begun the legislative process. While several key jurisdictions, including California and Delaware, have enacted the amendments, other important jurisdictions, such as New York, have not. The centerpiece of the amendments is the addition of a new Article 12 that governs the transfer of property rights in certain intangible digital assets, including AI and blockchain, and important changes to Article 9 of the UCC relating to the perfection of security interests in these new types of assets. The amendments broadly define these new intangible digital assets as “controllable electronic records” (CERs). Generally speaking, the amendments’ changes demonstrate that the drafters envision a further migration toward electronic collateral in secured transactions, as evidenced by the broadening of types of collateral susceptible to the concept of “control,” which the drafters expressly state is intended to serve as the functional equivalent of possession for perfection purposes. Current Legal Regime While legislative momentum for universal adoption of the amendments is gathering, the market has yet to undergo a sea change, and many institutions and law firms are still relying on pre-2022 methods for perfection and transfer of electronic collateral. The current regime treats electronic collateral in one or more of the following categories: (1) payment intangibles under Article 9 of the UCC; (2) transferable records under the Uniform Electronic Transactions Act (UETA) or the Electronic Signatures in Global and National Commerce Act (ESIGN); or (3) electronic chattel paper under Article 9 of the UCC. States began adopting UETA in 1999, and as of today, 47 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted UETA. New York passed its own legislation: the Electronic Signatures and Records Act. In 2000, Congress passed the ESIGN Act to ensure the validity of electronic contracts and the defensibility of electronic signatures at the federal level. ESIGN contains provisions covering the same two broad purposes as UETA. One material difference between UETA and ESIGN’s transferable record provisions is that ESIGN’s provisions are narrower and only apply to electronic instruments that relate to loan secured by real property. The practical result of this is that the market does not rely on UETA or ESIGN for electronic instruments that relate to loans secured by personal property or for unsecured loans. Payment intangibles A “general intangible” is defined in Article 9 of the UCC as any personal property, including things in action, that is not otherwise classified elsewhere under Article 9. General intangibles do not include any tangible property, and the following classes of intangible property are excluded: accounts receivable, chattel paper, deposit accounts, and investment property. “Payment intangible” is a subset of general intangibles under which the principal obligation is the payment of money. Electronic collateral that does not qualify as electronic chattel paper or transferable records are generally classified as payment intangibles, although payment obligations for transferable records are also payment intangibles. A security interest in a payment intangible is perfected by filing a financing statement, pursuant to Section 9-312 of the UCC. Priority among secured parties is determined by the first-tofile-or-perfect rule set forth in Article 9. Transferable records Because Article 3 of the UCC governs only writings, the drafters of UETA and ESIGN extended certain concepts of negotiable instruments to electronic equivalents known as “transferable records.” A transferable record is an electronic record that would qualify as a negotiable instrument if it were in writing, provided that the parties expressly agree to treat it that way. Control under UETA and ESIGN, rather than possession, determines enforcement rights for a transferable record, and control may be established by maintaining a single authoritative copy of the record in a compliant electronic vaulting system. The concept of a holder under Article 3 is replaced with the concept of a party having control for transferable records. The concept of a holder in due course of a negotiable instrument is therefore also applicable for transferable records. It is worth noting that control under UETA and ESIGN does not confer perfection under Article 9. Because transferable records are not an Article 9 class of collateral, they would default to being classified as payment intangibles and are therefore perfected solely by filing a financing statement. STRUCTURED FINANCE SPECTRUM, FALL 2025 | 13 UCC Futureproofing Electronic collateral that does not qualify as electronic chattel paper or transferable records are generally classified as payment intangibles, although payment obligations for transferable records are also payment intangibles.
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