The state of Montana joins the list of crypto friendly states in the United States of America with its recent legislation that exempts utility tokens from securities laws. This legislation, House Bill 584, was asserted by the governor of the state, Steve Bullock on the 8th of May. It was titled “Generally revise laws relating to cryptocurrency.” This step is a giant stride in the quest of mainstream crypto adoption in the state.
State Representative Shane Morigeau initiated the bill, and it had its first reading in February 2019. The bill is stipulated to come into effect as from July 1.
According to the new law, a utility token is defined as a digital token that is created, recorded on the blockchain, and as well have the capacity of being exchanged without a third party. Also, it can be issued to enable owners to access a good or service delivered by the issuer without vesting the holder with any ownership interest or equity interest in the issuer. In essence, the legislation gives cryptocurrency the power of usage as a legal tender.
Further, the bill noted that utility token transactions, however, have to meet some requirements with the sole purpose of being “primarily consumptive.” Meanwhile, the use of the token for speculative or investment purposes is prohibited. The prohibition of the use of the token for speculative or investment purposes is against the popular trend that trails the use of cryptocurrency. There is a higher preference for use speculatively or for investment than other purposes.
However, despite the exemption of utility token from the state securities law, issuers are still to interact with the securities commissioners, and a notice of intent must be filed for such a token to be sold.
The recent step taken by the state of Montana is similar to the previous path trodden by the state of Wyoming and Colorado to make the states Crypto friendly. Wyoming passed legislation to recognize Cryptocurrency as money in January 2019, and subsequently, Colorado passed cryptocurrency exemptions to its digital token act. This signals the growth of mainstream Crypto adoption in the United States of America.