📰 What is Montana exactly doing?


Law SB 265 — Financial Freedom and Innovation Act


  • Montana approved the Senate Bill 265 (SB 265), called Financial Freedom and Innovation Act. It recently went into effect.

  • With this law, Montana creates a clear regulatory pathway for companies that issue “network tokens” — network tokens that serve decentralized services such as computing, data storage, content streaming, etc.

  • The issuing companies of these tokens can apply to the office of the Commissioner of Securities and Insurance (CSI) for their tokens to be certified / recognized as non-securities, provided they meet certain disclosure, transparency, legal definitions, etc.


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  • Senate Bill 178 (SB 178): already in effect, protects cryptocurrency miners ('digital asset mining') against discriminatory electric rates, recognizes digital assets as personal property, and prohibits additional taxes when cryptocurrency is used as a payment method.

  • Another proposal was the House Bill 429, also known as the 'Inflation Protection Act', which sought to create a special state revenue fund to invest in precious metals, stablecoins, and digital assets like Bitcoin. That proposal gained traction in committees but was rejected in the full House.


🔍 Why is it relevant / what changes with Montana


  1. Pro-innovation crypto regulation

    Montana is positioning itself as one of the most crypto-friendly states, at least in certain aspects: providing clear legal definitions, paths for token-issuing companies, protection for mining, and legal guarantees of ownership of crypto assets.

  2. Certifying tokens as non-securities

    This is key: many crypto projects operate in uncertainty about whether they will be considered 'securities' by securities regulators. If Montana allows projects to qualify their tokens as non-securities through certification, they could avoid cumbersome securities registration processes, which reduces legal barriers. This could boost innovation.

  3. Legal protection for miners

    With SB 178, Montana prohibits certain burdens like discriminatory electric rates and adverse local limitations, making the state a stronger magnet for crypto mining. If electricity is cheap and favorably regulated, it can attract investment.

  4. Security / consumer protection

    SB 265 includes transparency clauses, legal disclosure requirements, which helps protect investors participating in certified tokens. It is not total laissez-faire; there are controls.

  5. Potential spillover effect

    If Montana does this well, it could serve as a 'model' for other states in the U.S. If neighboring states or other large states adopt similar laws, it may incentivize crypto companies to choose regulated and safer jurisdictions, improving the overall ecosystem.

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⚠️ Risks, doubts, and what is still unclear


  • How strict will the certification requirements be: complying with transparency, auditing, disclosures, compliance can be costly; some small startups may not be able to do it.

  • Federal vs state regulatory ambiguity: even if Montana makes a favorable law, federal regulators like the SEC or the Treasury may have rules that govern across the U.S., which can create conflicts or legal unpredictability in certain cases.

  • Non-security token market is not 'risk-free': just because a token can be certified as 'non-security' does not mean there is no risk of fraud, loss, or that its holders do not have tax liabilities or other types of risk.

  • Implementation / enforcement: a nice law is useless if the regulatory office does not have the resources/capacity to review certificates, enforce standards, audit, supervise. If enforcement is lacking, there may be abuse.

  • Political or public resistance: we have already seen that some initiatives (like HB 429) were rejected. There may be fiscal opposition, concern over the use of public funds, or resistance from those who do not want regulations favoring crypto.

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🔮 What to watch next


  • See which projects are already applying for certifications under SB 265. If any large company does it, it will be a sign that the law is already starting to move.

  • What tokens meet the defined criteria: legal definitions like 'network token' can be narrow or broad, depending on the implemented regulation.

  • How the crypto market responds (token prices, movement of companies developing networks, mining) in Montana; if there is a flow of companies or investment towards Montana.

  • If there are legal disputes or challenges from federal regulators regarding the interpretation of these state laws.

  • How other states observe this model: if several states adopt similar laws, there may be beneficial regulatory competition.