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Digital Assets Regulation

REGULATION No. 002

This regulation is a consumer protection law that defines blockchain, digital assets, digital securities, virtual currencies and Non-Fungible Tokens. It also classifies digital assets as personal property and includes rules for their control, possession, and agreements. For an easy to understand explanation of this regulation, visit here.

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Topics included:

  • Blockchain
  • Digital Assets
  • Digital Securities
  • Non-Fungible Tokens

Related Regulations:

Visit the Regulation's easy-to-understand explanatory page

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(1) Whereas Green Earth Zone is the legal name of the Catawba Digital Economic Zone.
(2) Whereas the Green Earth Zone aims to offer all engaged in peaceful trade a safe haven for legal digital commerce;
(3) Whereas existing regulations designed for traditional transactions are not optimally suited for the advent of technically innovative forms of commerce;
(4) Whereas businesses using innovative technology for benign purposes should be treated equally to other businesses in similar sectors using traditional means of commerce;
(5) Therefore this Digital Assets Regulation provides a framework for trade in intangible properties and services by clarifying their treatment under the Zone Civil Code.
This Regulation qualifies under Zone Civil Code Title VI, Ch. 9 § 9-201(b) as a law that establishes a different rule for consumers.

(1) Blockchain: Means a distributed ledger database that uses a consensus-based, decentralized, and mathematically verifiable process to reliably record an ordered sequence of transactions in Digital Assets.

(2) Digital Asset: Means a machine-readable representation of rights to access, use, control, erase, or transfer information, and is either a Digital Consumer Asset, Digital Security, or Virtual Currency.

(3) Digital Consumer Asset: Means a Digital Asset primarily used, borrowed, or bought for consumptive, personal, or household purposes and that does not fall within the meaning of Digital Security or Virtual Currency under this section.

(4) Digital Security: Means a Digital Asset that is a security and is not a Digital Consumer Asset or Virtual Currency.

(5) Virtual Currency: Means a Digital Asset that is:

  • (A) Used as a medium of exchange, unit of account, or store of value;
  • (B) Not recognized as legal tender by the United States government; and
  • (C) Not a Digital Consumer Asset or Digital Security.

(6) Non-Fungible Token (NFT): Means a type of indivisible Digital Asset verified by a Blockchain to have unique attributes and associated with an electronic signature.

(a) Digital Assets are classified as follows: (1) Digital Consumer Assets are intangible personal property and shall be considered general intangibles, as defined in Zone Civil Code Title VI, Ch. 9 §9-102(a)(42), only for the purposes of Article 9 of the Uniform Commercial Code, as codified at Zone Civil Code Title VI, Ch. 9. (2) Digital Securities are intangible personal property and shall be considered securities, as defined in Zone Civil Code Title VI, Ch. 8 §8-102(a)(15), and investment property, as defined in Zone Civil Code Title VI, Ch. 9 §9-102(a)(49), only for the purposes of Articles 8 and 9 of the Uniform Commercial Code, as codified at Zone Civil Code Title VI, Ch. 8 §8-9. (3) Repealed by Resolution 001 of Zone Authority Commission adopting the Uniform Commercial Code Amendments (2022) and Article 12: Controllable Electronic Records.

(b) A Digital Asset may qualify as a financial asset under Zone Civil Code Title VI, Ch. 8 §8-102(a)(9) pursuant to an agreement with the owner of the Digital Asset, in which case it shall remain intangible personal property.

(c) A Non-Fungible Token may be classified as a Digital Consumer Asset or Digital Security, depending on the nature of its use under this Regulation.

(d) A bank providing custodial services under a banking regulation of the Zone or of any other jurisdiction in the United States, including its possessions and territories, shall be considered to meet the requirements of Zone Civil Code Title VI, Ch. 8 §8-102(a)(14).

(e) The classification of Digital Assets under this section shall be construed in a manner to give the greatest effect to this Digital Assets Regulation, but shall not be construed to apply to any other asset.

Repealed by Resolution 001 of Zone Authority Commission adopting the Uniform Commercial Code Amendments (2022) and Article 12: Controllable Electronic Records

Repealed by Resolution 001 of Zone Authority Commission adopting the Uniform Commercial Code Amendments (2022) and Article 12: Controllable Electronic Records

Judicial panels formed under Title IX of the Zone Civil Code shall have jurisdiction to hear claims in both law and equity relating to Digital Assets, including those arising from this Digital Assets Regulation, Title VI, Ch. 10 of the Zone Civil Code, and Article 9 of the Uniform Commercial Code, as codified at Title VI, Ch. 9 of the Zone Civil Code.