The State of Montana has recognised utility tokens and also exempted them from state securities by passing a new bill this month. House Bill 584, which was titled as “Generally revise laws related to cryptocurrency,” was signed by Steve Bullock, the Governor of Montana, on May 8.
Commenced by the State Representative Shane Morigeau, the bill had its very first reading in February this year. Currently, the Bill has passed with 33-15 and will come into action on July 1.
The new law tells about a utility token as a digital unit which is created and recorded on blockchain, also capable of being exchange without a 3rd party and issued to help owners to access a good or service being delivered by the issuer “without vesting the holder with any ownership interest or equity interest in the issuer.”
As mentioned in the bill, a utility token transaction needs to meet several requirements, with the purpose of a token becoming “primarily consumptive,” while using these tokens for conjecturing or investment purpose is prohibited. In this regard, the legislators explained that the utility tokens need to be utilised to offer or receive goods, content or services.
While utility tokens are exempted from the state securities laws, yet the issuers of such tokens still need to interact with the securities commissioner and should file a notice of intent to sell such tokens.
By passing this new law for utility tokens, the State of Montana has joined other crypto-friendly states, including Colorado and Wyoming. The state of Wyoming, in January 2019, passed a bill recognising cryptocurrencies as money. The State of Colorado subsequently passed cryptocurrency exemptions to its digital token act, while enabling licensing requirements for the entities operating with digital tokens.