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Digital negotiable
Instruments
What are Digital Instruments?
The key characteristic of the digital instruments detailed below is that they each create an unconditional and independent payment obligation of the debtor in favour of the beneficiary. This payment obligation is independent of the underlying trade transaction.
The parties will be able to agree which digital instrument is to be used on a transaction-by-transaction basis.
Mercore facilitates the creation of these electronic transferable records via the trace:original solution (by Enigio AB).
Enigio has an independent technical endorsement issued by Omegapoint that confirms the trace:original solution fulfils the requirements of the UNCITRAL Model Law on Electronic Transferable Records (“MLETR”), and is a secure and reliable system for electronic transferable records.
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Bills of Exchange
Section 3(1) of the Bills of Exchange Act 1882 defines a bill of exchange as: “An unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer”.
Promissory Notes
Section 83(1) of the Bills of Exchange Act 1882 defines a promissory note as: “An unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to, or to the order of, a specified person or to bearer”.
Electronic payment undertaking
The EPU delivers an irrevocable, unconditional, and independent payment undertaking that fulfils all requirements of a traditional negotiable instrument, albeit subject to contract law rather than common law.
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