Albany, NY – New York legislators have approved Assembly Bill A3307A, a broad update to the state’s Uniform Commercial Code (UCC) designed to encompass digital assets, virtual currencies, and other emerging technologies.

Also known as Senate Bill S1840A, Assembly version A3307A passed both chambers and is proceeding to enactment. Now that it has been passed in both chambers, the next step before it can officially become law is for the bill to be signed by the Governor.

The revised law adds a new Article 12 governing so-called “controllable electronic records” (CERs) and revises existing articles to cover electronic money and digital contracts.

Advocates say the changes will treat digital assets more like traditional negotiable instruments, ensuring that purchasers who acquire control of such assets take them free of unknown claims. 

If enacted, the reforms would maintain New York’s role as a leading commercial jurisdiction by modernising its long-established UCC framework.

Hanna Söderlindh, Head of Legal at Enigio, said, “By moving to enact UCC Article 12, New York strengthens the enforceability of electronic trade documents and provides critical legal certainty for secured transactions — a development that enhances cross-border recognition and aligns with international frameworks like MLETR and the UK’s ETDA. This is a pivotal step in harmonising digital trade laws across jurisdictions and gives market participants the legal clarity they need to scale digital trade with confidence. It sets the stage for a future where digital trade is underpinned by shared legal standards and cross-border enforceability.”

What is the UCC?
The UCC is the foundational legal framework for US commerce, developed by the Uniform Law Commission and the American Law Institute. Adopted by all states since the 1950s, it standardises rules for sales, secured lending, and negotiable instruments. Recent amendments address digital assets like cryptocurrencies and trade documents. Previously classified as “general intangibles,” such assets lacked clear rules on transfer and collateral use. The new Article 12 resolves this by introducing legal concepts of control and “take-free” rights, giving certainty to digital transactions.

Key changes in A3307A: Article 12 and Electronic Money

Senate Bill A3307A incorporates the model UCC changes approved by ULC/ALI in 2022 but tailored to New York law. 

The centrepiece is the addition of Article 12, which introduces the concept of a controllable electronic record (CER). 

A CER is defined as a record stored in an electronic medium that is susceptible to control, as described under the new provisions.

Under the new Article 12, certain digital assets (such as cryptocurrencies or tokenised securities) are categorised as CERs. 

When a CER is transferred, the transferee can acquire strong rights if they obtain “control” of the record. 

In particular, a “qualifying purchaser”, one who acquires control of a CER for value, in good faith and without notice of any competing claim, takes the asset free of any prior property interests. 

This creates a digital analogue to the traditional negotiable-instrument rule that protects good-faith purchasers of paper notes and drafts.

Specific powers define control under Article 12. A person has control of a CER if, for example, an associated electronic system gives that person (A) the power to use substantially all of the asset’s benefits and (B) the exclusive power to prevent others from using or transferring it. 

This might mean holding a blockchain private key or exclusive account access. 

Control may be established if the lender has functional exclusivity over the asset’s use and transfer, even if multiple parties hold the key, provided only the lender can effectively exercise those powers.

Once control is obtained, the new UCC rules operate so that earlier liens or claims are cut off, and the purchaser does not need to hunt for obscure filings on the blockchain.

In addition to Article 12, A3307A amends Article 9 (secured transactions) to cover “electronic money.” The bill defines electronic money as “money in an electronic form” and creates a parallel control concept in Section 9‑105A. 

This section provides that a person has control of electronic money if the money or its system yields (A) the power to use substantially all its benefits and (B) exclusive power to block others and transfer it. A secured party that obtains control over electronic money (such as certain stablecoins) would similarly take it free of prior security interests, akin to the CER rules. 

Other amendments in A3307A update definitions (for example, adding “electronic” to terms like “delivery” and “holder”) and ensure electronic negotiable documents (digital bills of lading, for example) are included where previously only paper forms were mentioned.

The New York reform makes clear that digital assets falling under Article 12 or the amended definitions will be treated as valid forms of collateral and ownership.

Notably, the bill preserves longstanding New York principles (such as the rights of good-faith purchasers of negotiable instruments) and applies them to electronic equivalents. 

As the Legislature’s analysis explains, updating the UCC in this way is meant to “encourage parties to choose New York law and jurisdiction to govern commerce in digital assets” by affording them familiar legal effects.

What about the UNCITRAL Model Law on Electronic Transferable Records (MLETR)?

Professor Sarah Green, Head of Digital Assets and Trade Finance at D2 Legal and Global Advisory Panel member at TTP, said, “Crucially [this bill] coheres with those of the ETDA and the Property (Digital Assets etc) Bill in the UK.”

New York’s UCC amendments parallel a global trend toward digitising trade documents and records. 

UNCITRAL’s Model Law on Electronic Transferable Records (MLETR), promoted in 2017, instigated this movement. 

MLETR provides a legal framework stating that an electronic transferable record (such as an electronic bill of lading or electronic promissory note) has the same legal effect as a paper document, provided it contains the required information and a reliable method is used to ensure its integrity and to establish exclusive control. 

Specifically, Article 11 of MLETR requires that control of an electronic record be established through a reliable method that identifies the person in control and ensures there is only one authoritative version of the record.

Building on MLETR, several jurisdictions have enacted laws for electronic trade documents. The recent UK Electronic Trade Documents Act (ETDA) 2023 permits e-bills of lading and other documents to be “possessed” on a certified electronic platform, conferring the same rights as paper possession. 

Under ETDA, the system must be “reliable” so that an electronic document is singular and secure. As one advisory notes, ETDA effectively lets holders of electronic trade papers exercise the same rights as holders of physical papers. Trade commentators have observed that DNIs (digital negotiable instruments such as e-promissory notes) became a viable finance tool in the UK once the ETDA took effect in 2023.

Comparison: MLETR, ETDA and the UCC reforms
The MLETR/ETDA framework focuses specifically on trade documents: it ensures that once an e-record meets system-reliability requirements, it is treated like a transferable paper document.

In contrast, UCC Article 12 applies to certain digital assets that can be subject to control — but explicitly excludes electronic trade documents such as electronic bills of lading and electronic promissory notes.

UCC Article 12 does not create a special “electronic record” category under trade law but integrates digital assets into the UCC’s general property rules. Article 12 relies on a legal concept of ‘control’ (akin to possession) to determine rights in certain digital assets, without mandating a particular technology or platform.

Luca Castellani, legal officer at UNCITRAL and a Global Advisory Panel member of TTP, said, “The concept of control in UCC Article 12 is significantly different from the one in MLETR and ETDA. MLETR and ETDA enable the use of electronic trade documents while preserving existing law, so that the same rules on bills of lading or promissory notes (or any other transferable document or instrument) would apply regardless of the medium chosen.

“Rules on digital assets such as cryptocurrencies and stablecoins also include substantive law, as these assets do not have a paper functional equivalent.

“It is very important to distinguish the two notions of electronic trade documents and of digital assets. Electronic trade documents in the US are regulated in Articles 7 and 9 UCC, UETA and E-SIGN, which are laws broadly compatible with MLETR and ETDA.

“UCC Article 12 serves a different purpose and its provisions do not apply to existing electronic trade documents, as provided for in a disconnection clause.”

Note: Articles 7 and 9 of the UCC already provide a framework for electronic trade documents and secured transactions, broadly aligned with MLETR. Article 12 introduces a new legal category for digital assets that do not have a physical equivalent and does not apply to electronic negotiable instruments.

Hanna Söderlindh, Head of Legal at Enigio, said, “By adopting UCC Article 12, New York strengthens the enforceability of electronic trade documents and provides critical legal certainty for secured transactions, a development that enhances cross-border recognition and aligns with international frameworks like MLETR and the UK’s ETDA. This is a pivotal step in harmonising digital trade laws across jurisdictions and gives market participants the legal clarity they need to scale digital trade with confidence. It sets the stage for a future where digital trade is underpinned by shared legal standards and cross-border enforceability.”

Industry and regulatory reaction

Legal and industry stakeholders have broadly supported the adoption of the 2022 UCC amendments. The American Law Institute and the Uniform Law Commission formally approved the reforms in 2022, introducing Article 12 to establish property rights in intangible digital assets such as cryptocurrency, NFTs, and other tokenised instruments through the legal concept of control.

While some legal experts have welcomed the clarity that Article 12 brings to digital assets, it does not govern electronic trade documents, which remain under Articles 7 and 9 of the UCC.

Some industry groups have expressed support for the UCC amendments’ alignment with global digital commerce trends, though legal experts note that Article 12 and MLETR serve distinct purposes.

In the absence of a federal legal instrument for digital trade documentation, BAFT has supported the use of the UCC as the primary mechanism for harmonisation across US states.

“BAFT applauds the New York State legislature, Senator Brad Hoylman-Sigal and Assembly member Alex Bores for their leadership to pass these amendments that will bring NY law in line with the rest of the world on digital trade,” said Tod Burwell, President & CEO of BAFT and Editorial Board Member at TTP.

The International Trade and Forfaiting Association (ITFA) has also supported legal developments that enable the creation and recognition of digital negotiable instruments, such as electronic bills of exchange and payment undertakings. 

In its publications on digital negotiable instruments, ITFA has emphasised the need for legal frameworks that incorporate the principles of control, integrity, and singularity to ensure the enforceability of such instruments.

Michael Sullivan, Partner at Sullivan & Worcester LLP, told TTP, “This is a terrific development. It will bring New York in line with other key jurisdictions, lower transaction costs, and almost certainly increase credit availability. It will benefit New York, New York banks, and US customers. Everybody wins. Kudos to ITFA for stepping up.”

The UCC amendments, particularly Article 12’s framework for controllable electronic records, provide the basis for these developments under US state law, including in New York.

“This decision represents a major milestone for the trade finance community given the importance of New York law at global level. It follows the alignment of English Law in 2023 and French Law in 2024 to UNCITRAL’s MLETR”, said André Casterman, ITFA Board Member and chair of ITFA’s DNI Initiative. “Negotiable instruments are critical in commerce, and we expect this new New York Law based digital option to grow their use at both domestic and cross-border level.”

New York’s legislative sponsors have highlighted the economic rationale for adopting the reforms, noting that while the state has historically served as the preferred jurisdiction for paper-based commercial transactions, it risks losing this status without updating its commercial laws for digital instruments.

The amendments are intended to ensure that New York law remains relevant and attractive for commerce. 

No major regulatory objections have been publicly reported during the legislative process.

The bill reflects a multiyear effort to align domestic legal treatment of digital assets with evolving global standards.

Effective date: 180 Days from enactment

A3307A, as amended, includes a 180-day delay before most provisions take effect, giving businesses and legal systems time to prepare for implementation. 

If signed into law in June 2025, the UCC amendments would likely become effective in December 2025. 

The bill now awaits final enactment. 

If signed, New York would join over 25 other states that have enacted the 2022 UCC amendments, reinforcing its role as a leading legal hub for digital commerce and trade finance.

FAQs on the UCC amendment

Provided by Patrik Zekkar, CEO, Enigio, Global Advisory Panel member, Trade Treasury Payments

What practical impact will New York’s adoption of UCC Article 12 have on the enforceability and transfer of digital assets or tokenised instruments?

New York’s adoption of UCC Article 12 establishes a robust legal framework for recognising electronic trade documents as legally valid, enforceable, and transferable like their paper-based equivalents. This significantly reduces legal ambiguity around possession, control, and negotiability of such documents when issued or transferred in electronic form. It also facilitates their use as collateral in secured transactions under UCC Article 9. In cross-border trade, where New York law is frequently chosen as the governing law in trade finance documentation, this reform enables parties to rely on electronic documents with a higher degree of legal certainty, aligning closely with international standards and helping bridge the legal gap between traditional paper instruments and emerging digital trade practices.

How does the UCC’s concept of “control” for digital assets compare with frameworks like Model Law on Electronic Transferable Records (MLETR) or the UK’s ETDA?

UCC Article 12 defines “control” through a set of functional criteria: (1) the ability to obtain substantially all the benefit from a Controllable Electronic Record (CER); (2) the exclusive power to prevent others from doing so; and (3) the exclusive power to transfer that control. This concept is broadly aligned with international frameworks such as MLETR and the UK’s ETDA, which also focus on exclusive control and integrity of the record. However, a key distinction lies in technological assumptions: UCC Article 12 is designed with blockchain and other distributed ledger technologies in mind, often relying on cryptographic methods to establish and evidence control. By contrast, MLETR and ETDA are explicitly technology-neutral, requiring only a “reliable method” to demonstrate control, access, and integrity. This makes MLETR more adaptable across varying digital infrastructures, whereas UCC Article 12 offers more detailed rules for systems that use technologies like blockchain to verify control, which can improve legal certainty but may be less adaptable to platforms using other types of digital infrastructure.

Will this reform support or accelerate the adoption of electronic negotiable instruments in trade finance?

Yes. UCC Article 12 is a critical enabler for the adoption of electronic negotiable instruments in trade finance by providing a clear legal foundation for their recognition, transfer, and enforceability under New York law. Instruments such as electronic promissory notes and other digitally native records of obligation can now be treated with the same legal effect as their paper counterparts, removing longstanding uncertainties that have hindered digitisation. This development allows banks, corporates, and trade platforms to integrate electronic documents into traditional financing structures confidently. By aligning with international standards like MLETR and the UK ETDA, the reform also supports cross-border use and interoperability, accelerating adoption in key global trade corridors where legal certainty and risk mitigation are essential.

What legal certainty or protections does this give to banks, fintechs, and buyers in digital trade or tokenised payment flows?

The legislation provides a clear and enforceable legal basis for the use of electronic trade documents in commercial and secured transactions. Recognising CERs and allowing the perfection of security interests under UCC Article 9 gives financial institutions and platforms the legal clarity needed to treat electronic documents as reliable instruments for collateral, settlement, and compliance. For banks and fintechs, this reduces legal risk and supports the development of digital trade finance solutions. For buyers and sellers, it ensures that electronically issued trade documents carry the same legal weight as their paper counterparts, enabling greater trust and efficiency in digital trade workflows.

How significant is it that New York, rather than a federal authority, has taken the lead on these digital asset rules?

It is highly significant. New York is one of the most influential commercial jurisdictions in the world, with its law frequently chosen to govern international trade and finance contracts, particularly in sectors like commodity finance and shipping. By taking the lead on adopting UCC Article 12, New York not only sets a precedent for other U.S. states to follow but also reinforces its position as a global standard setter for digital trade law. In the absence of a federal framework, New York’s action gives legal and commercial stakeholders a credible, well-established legal basis to structure and enforce electronic trade transactions, both domestically and cross-border.

Does this legislation go far enough to support digital trade at scale, or are additional legal or technical frameworks still needed?

The legislation represents a significant step forward in establishing the legal certainty needed for digital trade, but it is not sufficient on its own to enable adoption at scale. Further progress is needed in three key areas: (1) alignment with international legal frameworks to ensure cross-border recognition, (2) development of interoperable digital infrastructure to support seamless document exchange, and (3) broader market adoption by industry participants. Legal certainty is an essential foundation, but the success of digital trade will ultimately depend on how well legal, technical, and commercial systems work together across jurisdictions