*By Julie Barrett, Founder, Conservative Ladies of Washington
In Washington state, like many other states, our legislature currently has a bill that has passed the Senate and is now in the House that would update the Uniform Commercial Code (UCC). This bill passed unanimously out of the senate with very little discussion or debate and only one person testifying in support.
Since it’s passing, concerned citizens have been sounding the alarm after the veto by Governor Kristi Noem of a similar bill passed in South Dakota. The concern is not without merit. The bill, on its own, may not seem to be all that bad, but when you consider the ultimate goal, it appears that it could be a gateway for many changes that are not in the best interest of the American people.
My friend Teo and I were having an email exchange about Washington’s SB 5077 and he offered some very interesting observations and I asked if I could share them publicly. Below are his takeaways and concerns with this bill.
SSB 5077 and it seems to be setting the stage for changes in:
- what we consider to be “money”.
- what we consider to be acceptable “consideration for the purpose of forming legally binding, enforceable contracts (key essentials of a contract being: offer, acceptance, and consideration (money or someting of tangible, controllable, and of value). There are some more academic components of a contract like, mode of acceptance (was it clear to the parties HOW to execute the contract), but the three I mentioned are the big ones.
- who can form a contract and under what circumstances.
- sales of goods for more than $500 not being recognized without a written contract (the the bill itself is stupidly written to say that a contract for sale of goods worth more than $500 is not valid unless… there is a contract for sale of goods worth more that $500… (?!) weird. Same thing for values over $1,000, with the same oddball drafting.
- what we consider to be “negotiable instruments” …and this is concerning because in the context of crypto currencies, digital currencies, NFTs, other non-fiat, non-traditional notions of negotiable checks, notes, promisses, the government may be writing the foundation of something that we need to understand to understand this bill, but that we do not yet understand.
- what and whom we consider to be customers or beneficiaries of banks.
- whom we consider to be in “control” of an asset – whether it is a traditional asset or some new non-fiat, digital asset – AND – how that person establishes and can prove control of that asset in the future. This is an area that can get into conspiracy theory territory quickly.
- what an investable security is, and who controls it.
- Some interesting language that establishes: “…The amendments revise almost every article of the UCC and add a new Article 12 addressing certain types of digital assets defined as “controllable electronic records,” ” – is this to protect innocent, unknowing people from getting robbed with crypto offers? Or, is this building a back door for government to confiscate digital assets, or deems some of them valuless?
- where and how can bank authorizations come from.
The stuff about changing what it means to “sign” a contract doesn’t bug me because many contract do not yet recognize digital execution (DocuSign, Adobe Sign, etc.) but should.
Some of the language about a bank not having to physically destroy a check to show it is exchanging an asset of value doesn’t really bug me.
It’s unclear whether the language about where and how can bank authorizations come from is sketchy – e.g., is the bill saying that someone MUST send any bank or other financial services authorizations ONLY from a known accout that has been identified by personally identifiable information? Or is it saying that someone could conduct a transfer of exchange of a digital currency for goods from a totally anonymous IP, email, or other location? Not sure.
Any time we’re changing the notion of control over some account or some asset, and adding conditions to that control, I think we have to have someone pretty expert to opine because this is another area that can get deep into the weeds quickly.
The whole idea of “Controllable Accounts, Controllable Payment Intangibles, and Controllable Electronic Records…” is where we could go really deep and get very into the conspiracy weeds, especially based on what we’ve seen with the IRS wanting to tax crypto, exchanges wanting to regulate crypto, the government of China wanting to control their citizens’ social credit and access to money based on how good of subjects they are being (a strategy that our current leftist state and federal regimes admire), and the general disdain of the government for “offshore” style banking and financial strategies that effectively remove government control of one’s financial assets.
If these laws pass and the UCC is fully brought up to speed, can the federal and state governments confiscate property that they deem was not the subject of a “proper” contract under the UCC? For example, say I mine 50 million dollars worth of Bitcoin and you agree to sell me some amazing property in exchange for my Ferrari and a portion of my crypto fortune, and you hand off the property deed to me electronically and I store it in my safe but do not register it with the county recorder’s office, did we actually make a real transaction that would face government scruitiny? Certainly, my crypto, my Ferrari, and your property all have undeniable value, BUT – under this bill, we may have transacted and contracted in a way that exposes us to the government deeming that our transaction did NOT contain the right elements and therefore is an empty set.
What are your thoughts? We’d love to hear from you as we work to learn more about this bill and the effort to usher in CBDC across the country.
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