Colorado’s Governor Jared Polis has signed a new law that exempts cryptocurrencies from securities laws. The bill was first introduced in January, described as providing “limited exemptions from the securities registration and securities broker-dealer and salesperson licensing requirements for persons dealing in digital tokens.”
The Digital Token Act, as it is called, will make the application of blockchain technology and growth of related companies in the space much easier, as digital assets are not subject to securities laws that would otherwise encumber them with stricter regulation.
Exciting day for #blockchain technology. @GovofCO @jaredpolis signed the #Digital Token Act today with key legislators, Attorney General @pweiser, and #Colorado cabinet members Patty Salazar with @DORAColorado, @BetsyMarkey with OEDIT, and @TheresaSzczurek of @OITColorado. pic.twitter.com/erOEloEdpy
— TheresaSzczurek (@TheresaSzczurek) March 7, 2019
Digital assets are here considered to be for “consumptive purposes,” which means they will not face prohibition if they meet all of the criteria. “Consumptive purposes” is defined as a “means to provide or receive goods, services, or content, including access to goods, services, or content.”
Governor Polis highlighted the decentralized benefits of the technology:
Blockchain provides a way to secure our data without relying upon big business or big government.
The act also makes statements on the potential of blockchain technology to attract entrepreneurs and better tech systems:
Blockchain technology has the potential to create new forms of decentralized “Web 3.0” platforms and applications that have advantages over the current centralized internet platforms and applications…Crowdfunding consumer goods platforms provide a means for companies and entrepreneurs to acquire growth capital and customers by pre-selling the right to receive consumer goods before the goods are ready to be sold or used, in addition to providing a marketplace for the purchase and sale of consumer goods that are ready for use.
The act will take effect on August 2.
In the past year, an increasing number of states in the U.S. have opened themselves up to blockchain technology and cryptocurrencies, including Wyoming and New Hampshire.
Colorado has stepped up its focus on the space. As far back as January 2018, lawmakers in Colorado introduced a bill in the United States Senate that suggested blockchain technology should be used to protect private data from cyber attacks.
Meanwhile, other states have also considered how the technology could be used to bolster the existing economy and tech systems. Wyoming, a state pioneering blockchain application, has passed multiple bills, including one that recognized cryptocurrencies as money.