In Search of the Optimal Law Governing Digital Payment Rights

In the article In Search of the Optimal Law Governing Digital Payment Rights, Marek Dubovec evaluates how modern commercial legal frameworks can be modernized to accommodate emerging digital trade paradigms, such as deep-tier supply chain finance. The author analyzes and contrasts traditional legal approaches to receivables and negotiable instruments against functional digital equivalence models—such as the UNCITRAL Model Law on Electronic Transferable Records (MLETR)—and new digital asset frameworks like UCC Article 12 and the UNIDROIT Principles on Digital Assets and Private Law. By applying six core legal elements—scope, transfer mechanisms, divisibility, transferee protections, enforcement, and conflict of laws—the Article assesses how different regimes handle novel instruments like irrevocable payment undertakings and digital trade tokens. Dubovec finds that framing digital payment rights as controllable digital assets offers superior efficiency, certainty, and protection compared to attempting to digitize archaic negotiable instruments law or relying solely on traditional receivables rules. Ultimately, the author recommends that states adopt a Product-focused Reform Strategy (PRS) to tailor legislative solutions directly to the specific legal and operational needs of targeted financing structures.