The use of cryptocurrency has permeated new industries. As it does so, the need to confront the broader commercial law implications of cryptocurrency, particularly the applicability of the Uniform Commercial Code (U.C.C.), becomes more pronounced. For example, creditors and debtors increasingly use cryptocurrency as collateral. But Article 9 of the U.C.C. does not expressly mention cryptocurrency. Fortunately, Article 9 is flexible enough to accommodate the collateralization of cryptocurrency within its
currently defined collateral types. The foregoing, notwithstanding Article 9, could be amended to improve the functionality of Article 9 for those to engage in secured transactions with crypto-collateral. Rather than build upon the existing literature on how to optimize Article 9 collateral, this article examines the broader question of whether Article 9 should be amended to better accommodate crypto-collateral. This article suggests that the decision to amend Article 9 involves more than simply determining the most appropriate framework for enforcing security interests in crypto-collateral. Other considerations include: (1) the challenge of enacting a uniform amendment; (2) the uncertain future of cryptocurrency; and (3) the impact of further normalizing the use of cryptocurrency. Accordingly, this article does not seek to definitively answer the question of whether or how to amend Article 9 for cryptocurrency. Instead, it endeavors to deepen the conversation by examining some of the considerations at play so that informed decisions can be made by policymakers.
Kevin V. Tu, Crypto-Collateral,
SMU Sci. & Tech. L. Rev.