The Ocean State, Rhode Island, has recently proposed a bipartisan bill as per which the tokens with a rather ‘consumptive purpose’ (utility tokens), are to be set apart from the other tokens. They have been said, according to the bill, to be exempted from the existing securities law as archaic regulations cannot speak well for these tokens.
The founder and partner for Morgan Creek Digital, Anthony Pompliano suggests the exact same thing besides favoring the bill. He suggests that new technologies certainly require new set of rules to stick to. The bill has been proposed as bipartisan, meaning that the opposing side also favors this grand addition to the outline of financial laws. Pomp said;
The bipartisan bill from Rhode Island that is set to separate the tokens with a ‘consumptive purpose’ from the existing securities law, is a great gesture leading to a great start. Every new technology needs its own set of rules to be followed owing to differently structured environment.
Although the term consumptive refers to the wasting factor that eventually induces the target to run out but financially it refers to something else. It refers to a thing that produces the services and goods for the customers or the users to use. This refers directly to the digital assets which provide additional services for the users to store and transact through crypto exchanges. For example, vert is the coin that people can store in a native wallet for vertcoin, the Vertbase. The service allows the user to transact their previously bought and stored digital assets including vertcoin.
The law is a decent push for the assets other than fiats, for example the cryptos, to have their own set of rules and regulations. This is a step designed for the incumbent authorities in accepting the identity and uniqueness of the cryptos. Cryptos basically have a decentralized environment which is very different from the fiat centralized one. This is the most basic difference between the two entities that coaxes us to protest for new set of rules to govern things successfully.
A similar act was conducted by the lawmakers in Colorado as they sought to pull off the same maneuver. This action proves to be the pusher for other states tuning in for the same demand. Colorado stepping ahead of all the states encouraged other states like Rhode Island and Wyoming to fight for legal revolution regarding the crypto market. There is a chance that the movement propagated to Rhode Island too. The bill that the lawmakers proposed previously for Colorado defined the term consumptive purpose very elegantly. The bill states, that consumptive purpose means,
to provide or receive goods, services, or content, including access to goods, services, or content.
The securities laws that Pomp is referring to lie upon the ‘Securities Act of 1933’ which has been coming out in amended forms to us. The bill, colloquially termed as Truth in Securities law or act, majorly focuses over the transparency of monetary dealings ensuring that there is no fraudulent activity underway. Several amendments to the Securities Act of 1933 have passed since its creation. Amendments have been passed to update rules in 1934, 1954, 1959, 1960, 1970, 1980, 1982, 1987, 1996, 1998, 2000, 2010 and 2012. Signed by President Franklin D. Roosevelt, the act does not seem to justify cryptos owing to older origins. The bill plans on rewriting new laws which are then to be added to the whole act. The previous laws are not to encompass entities like the cryptos.
A rush of similar sort has risen up to Federal Levels too, as a US bill, as of Dec, 2018, was brought before the SEC in order to rewrite securities laws for the digital assets. The bill also demands new laws to be designed for the aforementioned tokens but rather on a Federal level. Pompliano points to the movement that is already in motion and will surely open new venues for both the crypto-assets and structures including the likes of the blockchain technology. Though there is wind that the state of Massachusetts is also pushing for a similar securities law alteration, nothing legit has risen up the news. There is nothing to back this wind up, time will tell where does the crypto movement go from here.
Another state, Wyoming runs ahead of the other ones as a year ago enacted the very situation. This bill, like the two aforementioned ones demanded the exact same thing, to be governed with newer laws regarding tokens with consumptive purpose. Rhode Island and others tracked a similar path but there is another race too, the race to be acknowledged first. Pompliano also has his say for the state of Wyoming praising the state for rushing things with this sort of critical matter.
Wyoming is so far ahead that it is hard to see at this point. Incredible execution.
Pomp, is mostly concerned with what comes the way for bitcoin as he previously referred it to be the king of cryptos. Nevertheless, the bill will provide beneficial for the cryptos altogether including the 99% that Pomp thinks do not bear the potential to make it big in the crypto industry.
There are very few utility tokens that I find compelling.
By this, Pompliano refers to the good old bitcoin and its contemporaries that comply with similar protocols. For example in case Dr. Craig S. Wright comes up with the right amalgam of things for his bitcoin SV, keeping up to the purest form of decentralization without any further make-up, Pomp will root for it obviously. Nevertheless, rest assured that the bipartisan law will smooth ways for not only the cryptos Pomp holds deer, it will also shed light onto the entire altcoins market.