The United States State of Montana has passed a new bill that will recognize utility token and exempt them from state securities. The new House Bill 584, titled “Generally revise laws relating to cryptocurrency,” was signed by the Governor of Montana Steve Bullock earlier this month and defines a utility token as a digital unit which is created and recorded over a blockchain. The token can be exchanged without a third party and allows 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.”
First initiated by State Representative Shane Morigeau, the bill had its first reading in February this year, has now passed with 33-15, and will come into effect on July 1. Per the bill, a utility token transaction has to meet a number of requirements, with the purpose of a token being “primarily consumptive,” while using such tokens for speculative or investment purposes is prohibited. In this regard, the legislators explained that utility tokens should be used to provide or receive goods, services or content.
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. By passing this utility token law, State of Montana has joined the league of other crypto-friendly states including Wyoming and Colorado.