Unidroit Principles on Digital Assets and Private Law—A Comparison to the Uniform Commercial Code, with an Emphasis on Control, Transfer, Custody, Innocent Acquirers, and Secured Transactions

Abstract The U nidroit Principles on Digital Assets and Private Law (DAPL) raise a number of questions for the national laws of different States: these include questions relating to the definition of digital assets, proprietary rights in digital assets, the transfer of digital assets, the rights of transferees of digital assets, and the use of digital assets as encumbered assets subject to a security right. In addition, there are matters concerning the application of insolvency law to digital assets. In all cases, the goal of the DAPL is to guide States in enacting laws to promote the availability of digital assets as a source of encumbered assets, provide predictability in transactions, and create efficient systems to implement these goals. The joint contribution assembles the observations of Steven Weise (U nidroit DAPL Working Group member during all of its sessions) concerning several main issues of the DAPL, with Edwin Smith (Chair of the committee which prepared the 2022 Uniform Commercial Code (UCC) revisions to address security rights in certain digital assets). Edwin responded to the queries proposed by Steven during his presentation. Edwin focused on how the UCC drafting committee prepared the revisions for the UCC to adapt to the new economic elements that digital assets represent. The Weise and Smith joint presentation describes possibilities to the States on how to deal with digital assets within national law from the USA UCC adaptation experiences and largely consistently with the DAPL.