Abstract

This chapter addresses the fundamental question (Grundfrage) of whether digital assets constitute property and what rules govern their commercial circulation. It reveals consensus across jurisdictions that digital assets are property, while highlighting how US courts’ pragmatic approach contrasts sharply with the theoretical frameworks of other common law jurisdictions. The chapter documents how digital assets challenge the traditional dichotomy between choses in possession and choses in action, with Commonwealth jurisdictions debating whether they constitute a third category altogether. American law has instead adopted a functional approach, prioritizing practical outcomes over rigid categorization. The chapter then examines digital asset circulation regimes before and after the 2022 UCC Amendments’ adoption of Article 12. The pre-amendment treatment of digital assets as general intangibles created legal uncertainty threatening market development, while Article 12 transforms this landscape by introducing the new category of controllable electronic records (CERs). This new framework establishes control as the digital equivalent of possession and creates a take-free rule that provides CERs with the attribute of negotiability. Through this analysis of digital assets, the chapter advances a broader theoretical claim about American property law: that the Uniform Commercial Code’s functional taxonomy has effectively displaced traditional common law categories, establishing a distinctly American legal approach that privileges commercial pragmatism and practical outcomes over formalistic doctrinal classification—a transformation that digital assets both reveal and exemplify.