Two lawmakers from the state of Colorado have introduced new legislation to exempt cryptocurrencies and certain digital coins from the various security laws. On last Friday, January 4, senators Jack Tate and Stephen Fenberg, representative of Republican and Democratic Party respectively, filed a new bill christened the “Colorado Digital token Act.” The bill proposes that digital currency used primarily for the consumptive purposes should be exempted from the various security laws given that these are not used for any investment or other speculative purposes.
Purpose of Bill
The newly introduced bill aims to remove the lingering uncertainty regarding the cryptocurrency regulations. The lack of confidence in the absence of any clear-cut regulations is holding back the organizations involved in creating the marketplace for the digital coins and extending platforms for digital assets. The senators claim that that the new digital token act will help the organizations in Colorado to raise funds for their expansion and growth activities using Crypto-economic platform. This, in turn, will help in job creation, infrastructure development, and boosting the local economy besides helping Colorado to emerge as a destination for the companies developing a new distributed open ledger Technology dubbed the “Web 3.0” applications and platforms.
According to the proposed bill document, the consumptive purpose of the cryptocurrencies means receiving or providing services, content, or products which include access to them. In order to qualify for the exemption, the time limit of 180 days has been decided for the consumptive purpose of the cryptocurrency. Also, the initial buyer is bound with the condition of not reselling or transferring of the digital token until and unless there is the availability of consumptive purpose.
Provisions in Bill
The bill very clearly mentions that the initial buyer is buying the digital token only for the consumptive purpose and there is no intention to use it for any kind of investment or speculative purpose. For the exemption purposes, an intent notice must be filed with the commissioner of state securities by the issuer, the bill adds further. In a related development last month, two members from the House of Representatives in the US filed a proposal dubbed “Token Taxonomy Act” which seeks to exclude the digital currency from being identified as security.