Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Uniform Commercial Code topic
No spam. Unsubscribe anytime.
Sen. Matt Klayman seeks UCC update to cover digital assets; committee sets amendment deadline
Summary
Senate Bill 252 would update Alaska's Uniform Commercial Code to govern "controllable electronic records" such as cryptocurrencies and NFTs; invited testimony argued the 2018 and 2022 amendments provide technology‑neutral rules to protect commercial transactions, and the committee set a May 14 amendment deadline and tabled the bill for later consideration.
Sen. Matt Klayman introduced Senate Bill 252 on May 11, asking the House Judiciary Committee to adopt 2018 and 2022 amendments to the Uniform Commercial Code that would create rules for "controllable electronic records" (CERs) such as virtual currencies, non‑fungible tokens and certain electronic promissory notes. "The updated law will help stimulate economic activity by providing legal certainty to these increasingly common transactions," Klayman told the committee.
The invited testifier, Edwin Smith, who chaired the committee that drafted the 2022 amendments, told members the changes were a multiyear effort by the Uniform Law Commission and the American Law Institute to modernize commercial law for digital transactions. "We needed to address digital assets," Smith said, explaining that the amendments permit electronic records to substitute for outmoded statutory "writing" requirements and provide rules for perfection and priority of security interests in digital assets.
Committee members pressed for concrete examples. Smith said, without the amendments, Alaskans who use stablecoins or other cryptocurrencies could be disadvantaged because current commercial law does not uniformly cut off adverse claims on transfers of those assets. "If someone hacks into my computer and steals my Bitcoin or my stable coin ... I can go out and claim it's mine," Smith said, adding that the 2022 changes streamline lender confidence when lending against those assets. He also cited trade finance, electronic bills of exchange and documents of title (warehouse receipts and bills of lading) as areas that increasingly rely on electronic systems and would benefit from the amendments.
Representative Vance asked whether the UCC amendments could or should address risks from autonomous artificial intelligence—for example, AI hacking crypto or AI being treated as a "person." Klayman deferred to the invited testifier for technical detail. Smith replied that the UCC is a body of private commercial law and is not designed to serve as a vehicle for broad AI regulation or consumer protection. "The issue that you're rightly raising is more of a broader issue than the Uniform Commercial Code itself can address," he said.
On definitions, members sought plain‑language explanations. Smith explained that the amendments recognize "series" entities (cells within an LLC) so that a protected series can grant a security interest in its assets without reaching the assets of other series or the parent company. He also said the 2022 amendments clarify the definition of "money": a cryptocurrency adopted as a government's fiat currency would be governed as a controllable electronic record under the UCC rather than treated as traditional "money," citing prior national experiments with Bitcoin adoption as fiat.
When Representative Costello asked whether the sponsor had received any opposition, Klayman said he was not aware of any and described the bill as broadly supported because it provides enabling, nonregulatory rules for private commercial arrangements.
Representative Grama set an amendment deadline for SB 252 for Thursday, May 14 at 5:00 p.m. and said the committee would set the bill aside and return to it at a later date. The committee took no formal vote on the bill during the hearing.
The committee thanked the sponsor and invited testifier and closed the hearing. The committee will consider amendments filed by the deadline and will take up SB 252 at a later meeting.
