UCC Article 12 State Adoption: Where We Are Now

The Uniform Law Commission finalized Article 12 in 2022, and two years later, most US states have adopted it. The pace surprised even those of us who were optimistic about commercial law modernization.

For digital asset lending, adoption status matters because perfection law typically follows the debtor's jurisdiction. A Colorado borrower's cryptocurrency is governed by Colorado law regardless of where you're located. If Colorado has Article 12 and your borrower's state doesn't, you're dealing with different legal frameworks for different loans.

Current Status

As of December 2025, over 40 states have enacted Article 12 with effective dates either passed or upcoming. Washington was first, effective January 2023. Delaware, Colorado, Indiana, Wyoming, and Montana followed in 2023. The bulk adopted during 2024 legislative sessions with mid-2024 or January 2025 effective dates.

The remaining holdouts are shrinking. Arizona, Connecticut, Florida, and New York have pending legislation. Alaska and Mississippi haven't yet introduced bills. By end of 2026, near-universal adoption is likely.

The current patchwork creates operational complexity, but the trend line is clear: Article 12 is becoming the standard framework for digital asset secured transactions.

What Adoption Actually Means

In states with effective Article 12, lenders have a clear path to perfect security interests in "controllable electronic records" through control. No UCC-1 filing required. Control can come through direct key custody, custodial arrangement, or smart contract escrow. The priority rules are explicit: control beats filing.

In states without Article 12, you're applying Article 9 to digital assets as general intangibles, which works to some extent. You can file a UCC-1 and probably have a perfected security interest, but the legal framework wasn't designed for these assets, and the certainty you get from Article 12 isn't there.

For lenders operating nationally, the practical implication is that you need jurisdiction awareness in your underwriting process. Before closing a loan against cryptocurrency, verify Article 12 status in the borrower's state. Apply the same control-based methods regardless, which gives you the best position available under either framework.

State-by-State Considerations

Most adopting states followed the ULC model text closely, though some made modifications worth knowing about.

California included some state-specific provisions, though the core framework remains intact. Review the specific statutory language if you're doing significant California volume.

Several states added consumer protection provisions that may affect retail lending. These typically create disclosure requirements or additional remedies rather than changing the perfection framework, but they matter for program design.

Transition rules vary by state. Most address interests created before the effective date, specifying how pre-existing security interests continue. If you have loans originated before Article 12 became effective in a state, review the transition provisions to confirm your position.

The Interstate Challenge

Choice of law provisions in your loan documents can govern substantive contract terms, but perfection follows debtor jurisdiction regardless. This creates multi-state complexity that careful documentation alone can't solve.

For individual debtors, the relevant jurisdiction is typically their principal residence. For organizational debtors, it's the state of formation. A Delaware LLC with a California managing member is a Delaware debtor for perfection purposes.

The practical approach is to apply control-based perfection universally, which gives you Article 12 protection where available and the best available position under Article 9 elsewhere. Belt-and-suspenders filing provides backup.

Looking Forward

The adoption trajectory suggests near-complete coverage by late 2026. At that point, interstate variation becomes a minor operational consideration rather than a significant program design factor.

The institutions building digital asset lending programs now should design for the end state while accommodating current variation. Build your control infrastructure to Article 12 standards, document according to the ULC framework, and apply consistent methods across jurisdictions. As adoption completes, you'll already be operating according to the uniform standard.

Verify current adoption status through the Uniform Law Commission at uniformlaws.org or state legislative databases. This tracker reflects publicly available information and does not constitute legal advice.