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“States are urged to refrain from enacting legislation pending the result of the committee’s work.” --Uniform Law Commission
The Uniform Law Commission today asked states considering its proposed model act regarding virtual currencies to refrain from enacting it and competing legislation while a newly-established committee considers the impact of emerging technologies on the Uniform Commercial Code (the model state law that governs commercial transactions in the US). The joint study committee will consist of members of the Uniform Law Commission and the American Law Institute.
This is major news, as bills are moving in the legislatures of California, Hawaii, Nevada and Oklahoma that are based on the Uniform Law Commission’s language for two laws, called the Uniform Regulation of Virtual Currency Businesses Act (URVCBA) and Supplemental Act. Rhode Island is considering the URVCBA alone. No state has yet enacted either law. Testimony at a senate hearing in Nevada last week regarding the model acts was mostly opposed, and a hearing in California was teed up for as early as this week. The bills in Hawaii and Oklahoma had already stalled.
Wyoming rejected both model acts and enacted a very different law earlier this year. Missouri shortly thereafter introduced a bill that mirrors Wyoming’s approach.
BACKGROUND
The Uniform Law Commission’s statement came at the end of its three-page response to a March 7, 2019 article written by Forbes.com contributor, Andrea Tinianow, called “A Split Emerges In Blockchain Law: Wyoming’s Approach Versus the Supplemental Act.” In the article, Ms. Tinianow--a UCC attorney in Delaware and former head of the Delaware Blockchain Initiative--criticized the Supplemental Act.
The Uniform Law Commission contacted Forbes.com to ask for correction of statements it deemed erroneous. Ms. Tinianow published a response on Forbes.com on March 24, 2019, explaining why she did not believe her article was inaccurate.
In response, the Uniform Law Commission today published its response, which it released in a tweet today. In that statement, the Uniform Law Commission said:
“To meet the growing need for law on this topic, the ULC and ALI have created a study committee to determine how the Code [the UCC] might be amended on a uniform basis to deal with emerging technologies. States are urged to refrain from enacting legislation pending the result of the committee’s work.
The study committee’s process will take into account diverse views and perspectives and practical applications, and it will draw from a wide range of skills and expertise. The process is especially relevant where some technologies are at early stages or otherwise have not fully matured and creative approaches need to be devised in anticipation of, and not to stifle, future transactions and developments. The committee welcomes participants from states that wish to be involved in its work and from individuals and groups with a stake in the development of appropriate laws to govern digital-asset transactions.”
Forbes.com will keep readers posted as the Uniform Law Commission’s process for replacing the Supplemental Act evolves.
NOTE (March 27, 2019): The Uniform Law Commission issued a new statement last night: "The third article mischaracterizes a ULC statement urging states to refrain from enacting legislation, like the new Wyoming law, that conflicts with the UCC (italics indicate changes to the original statement). The Uniform Law Commission's new statement can be read in its entirety here.
