(NakedCapitalism) Warning to Bitcoin enthusiasts: if you airily try dismissing UCC Article 9 as a nothigburger, you’ve just established you are unqualified to comment on commercial transactions in the US. Read what follows and be warned.
A new post at Credit Slips by Bob Lawless, based on a discussion with Professor Lynn LoPucki, raises a fundamentally important issue that will severely hamper the use of Bitcoin in commercial transactions once the issue is understood. As we’ve indicated in previous posts, the idea that Bitcoin might someday as anything other than a vehicle for speculation and a curiosity depends on whether it obtains a decent level of acceptance as a means of purchasing real economy goods and services. And as we will discuss in due course, forget about changing the UCC to accommodate Bitcoin; new Basel regimes are decided and implemented faster than changes to the UCC.
Readers who have followed us during the foreclosure crisis and read posts on chain of title issues will have heard us mention the UCC, because it played a critical role in analyzing securitizations. For newbies who are not lawyers (and forgive this for being a bit of a broad-brush treatment), UCC stands for “Uniform Commercial Code”. It is foundational legislation which was devised with considerable care and has been adopted in some form by all 50 states