Seeking to exempt blockchain tokens from securities laws for some use cases, lawmakers in the U.S. state of Rhode Island have jointly filed house bill 5595 on February 27.
Five Democratic and Republican senators are proposing to amend the Rhode Island Uniform Securities Act to include that sellers or developers of “open blockchain tokens” are not considered as issuers of securities and therefore exempt from the act.
However, the lawmakers cleared out that the exemption should be offered under particular conditions. First, the token should only be utilized for “consumptive purpose” and “only be exchangeable for, or provided for the receipt of, goods, services or content, including rights of access to goods, services or content.”
Next, they said that sellers or developers of a token should not sell it as a form of financial investment.
“If the token does not have a consumptive purpose available at the time of sale, the initial buyer of the token is prevented from reselling the token until the token is available for use for a consumptive purpose,” they added.
Furthermore, the bill states that those who offer exchange services of open blockchain tokens should not operate as brokers-dealers or those who deal in securities, given that they “electronically file a notice of intent with the secretary of state” in advance.
Open blockchain token, as the proposed legislation defined, is a digital unit which is developed, recorded in a digital ledger, and is “capable of being traded or transferred between persons without an intermediary or custodian of value.”
On the other hand, a similar bill in Colorado was passed on February 27 by state senators. A signature from the state governor is still needed before it finally becomes law.
Dubbed the “Colorado Digital Token Act,” Senate bill 23 was filed in January, proposing that digital tokens used for “primarily consumptive” manner should be exempted from securities laws, given that they are not marketed as “speculative or investment” products.