The United States State of Montana passes a new bill titled “Generally revise laws relating to cryptocurrency,” that will recognize utility tokens and exempt them from state securities.
Signed by the Governor of Montana Steve Bullock on May 8, House Bill 584, defines a utility token as a digital unit that is created and recorded over a blockchain. The token can be exchanged without a third party and gives owners access to a good or service delivered by the issuer “without vesting the holder with any ownership interest or equity interest in the issuer.”
First initiated by State Representative Shane Morigeau, its first reading was held in February 2019. The bill passed with 33-15, and will come into force on July 1. As per the bill, utility token transaction will have to meet some requirements for the token being “primarily consumptive, ” while using such tokens for speculative or investment purposes is prohibited.
The legislators further explained that the utility tokens should be used to provide or receive goods, services or content. Though utility tokens are exempt from state securities law, issuers will have to interact with the securities commissioner, while compulsorily filing a notice of intent to sell such tokens. With this utility token law, State of Montana joins the league of crypto-friendly states including Wyoming and Colorado.
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