Policy
While the Michigan Blockchain Council is not a politically focused organization, it believes that political education, and advocating for specific legislation and participating in ecosystem research helps achieve its stated mission of improving the business environment for its member organizations.
Legislative Initiatives
UCC 2022 Amendments
What is the UCC?
The Uniform Commercial Code (UCC) is a comprehensive set of laws governing commercial transactions in the United States. It’s not a federal law, but rather a model set of rules that each state has adopted, ensuring consistency in how business is conducted across state lines. The UCC aims to streamline and standardize commercial law, making it easier and more predictable for businesses to operate nationwide.
What are the 2022 UCC Amendments?
Why does Michigan need to pass the 2022 Amendments?
Passing the UCC 2022 Amendments will bring Michigan in line with 26 other states + D.C., and will provide clear definitions and procedures for Web3 businesses and financial institutions interacting with digital assets. Passing the UCC 2022 Amendments will make Michigan a more attractive place for these companies to do business by reducing cost and complexity by having its own special set of rules (or lack of) for the digital asset era.
How do the 2022 Amendments affect the Web3 industry?
- Controllable Electronic Records (CERs): Article 12 introduces the concept of Controllable Electronic Records (CERs), which encompass digital assets like cryptocurrencies (e.g., Bitcoin) and non-fungible tokens (NFTs). These assets, if they can be controlled, can now be used as collateral in secured transactions.
- Secured Transactions: The amendments clarify how businesses can use CERs to secure loans. Before these amendments, using digital assets as collateral was risky due to a lack of clear legal guidelines. Article 12 formalizes the recognition of CERs, controllable accounts, and controllable payment intangibles as legitimate collateral types.
- Perfection by Control: Lenders can now perfect security interests in CERs by taking control of the digital assets. This offers a new way to secure digital assets and provides added protection to lenders.
- Digital Assets as Collateral: Businesses holding cryptocurrencies or NFTs can now leverage these digital assets to obtain financing. This is particularly relevant for tech-focused businesses that rely heavily on digital assets.
- Cryptocurrency is Not “Money” under UCC: The UCC 2022 amendments clarify that cryptocurrencies, which are not government-backed, are not considered “money” under the UCC. However, they can still be used in secured transactions as general intangibles or CERs.
- Increased Certainty: Article 12, by providing clear rules for ownership, transfer, and secured transactions, brings greater certainty to digital asset transactions. This helps businesses engage in digital transactions with more confidence.
Status
The UCC 2022 Amendments require a package of bills to be passed to amend the original UCC legislation in Michigan and the various documents that reference the UCC.
Policy Positions
From time to time, the Michigan Blockchain Council will provide its opinion and express support for or against specific legislation. Below are the MBC’s positions on bills that have been introduced on the federal or state level. The MBC’s position may change as amendments to proposed bills are created or new information is released.
Michigan
Bill
Position
Streamlines setup of cryptocurrency mining operations in industrial zones.
Creates a state-run bullion depository and authorizes gold and silver backed currency, including a digital “Michcoin”
Amends the Management and Budget Act to establish a strategic Bitcoin reserve and allow crypto lending.
Allows public retirement funds to invest in Bitcoin via regulated exchange-traded products.
Prohibits state support for a U.S. CBDC. Protects crypto holders, node operators, and mining/staking activity from state-level regulation ("Crypto Bill of Rights").
Creates a Bitcoin mining program allowing operators to mine at abandoned oil/gas wells in exchange for plugging them.
Provides state income tax deductions for Bitcoin mining income derived from abandoned well sites (contingent on HB 4512).