Also known as: e-money · electronic monies
Written by attorneys — see sources below.
An electronic record of monetary value that functions as collateral under Article 9 of the Uniform Commercial Code. A security interest in electronic money may be perfected only by control under Section 9-314. The interest is perfected when the secured party obtains control and remains perfected only while the secured party retains control.
Eastern Electric extends a loan to Echo Systems and takes a security interest in Echo Systems' electronic money held in a digital wallet. Eastern Electric arranges to obtain control of the electronic money under the applicable control provisions. The security interest becomes perfected at the moment control is achieved.
Elemental Pharmaceuticals borrows from Eclipse Manufacturing and grants a security interest in electronic money stored on a blockchain platform. Eclipse Manufacturing obtains control to perfect the interest. When Eclipse Manufacturing later relinquishes control to allow Elemental Pharmaceuticals to transfer the funds, the security interest ceases to be perfected.
A security interest in electronic money may be perfected only by control under Section 9-314. The secured party must obtain control of the electronic money. Filing does not perfect an interest in this type of collateral.
Supporting sources
Perfection begins when the secured party obtains control. The interest remains perfected only while the secured party continues to retain control. Loss of control causes the interest to become unperfected.
Supporting sources