Security Token Offering in Monaco: the applicable law in review

Updated: Jul 14, 2020

Last year the Monaco Government had revealed its desire to become the world leader in environmental digital projects, by hosting ten projects per year and to boost Monaco's economy. At the Yacht Club of Monaco by presenting the Extended Monaco program the Monegasque Head of State, H.S.H. Prince Albert II said:

“In a digital world, Monaco is a country that turns its size into a strength, an asset that enhances the performance of our economic and social model, and makes it more sustainable and more human”

The Principality of Monaco has a long tradition in Science and Environmental protection initiatives. Indeed, Prince Albert II continues the legacy of this great grandfather with the Monaco Blue Initiative. By introducing the cutting edge technologies to such environmental and social initiatives, the impact will be considerably enlarged, by reason of the great leverage they exert.

STO (Security Token Offering) bill passed

On 16th of June 2020, the Bill related to STO (security token offering) passed by the National Council of Monaco. The Principality of Monaco set up a legal framework for the alternative method of financing by the means of the digital tokens. It's a huge step for Monaco and the industry itself. Here are my articles from 2018 and 2019 exploring the advantages of STOs and industry development.

In the document, the law refers to a " legal framework relating to token offerings, which are a form of fundraising carried out by means of a digital recording device on a shared register, and giving rise to the issuance of tokens, in return for the down payment made by investors." (the author translation)

The law was proposed by Franck Julien, the member of the Country National Council, and my ex-colleague in a telecom company. The document states that it covers complex technical and overall concepts touching the technological, legal and financial aspects.


  1. The Government is planning to focus, initially, on private STOs, opened to a restricted circle of investors or qualified investors, that targeting projects that meet an environmental or social ambition. The minimum subscription amount to be set by sovereign ordinance. The amount to be determined later with the view that a minimum subscription amount should be acceptable for the public offers later. The vision is such that the STO' s scope will be clear in a few years but the development of the necessary infrastructure should be considered.

  2. STO, the tokens received by the investor are called security tokens (translated by "tokens securities ") and have the characteristics of a financial instrument. They confer one or more rights (right to shares in the capital of the issuing company, right to vote at a general meeting, right to dividends).

  3. STOs are reserved for joint-stock companies registered in Monaco (the company being formed in Monaco can nevertheless submit a request). Excluding companies with the legal form of SARL ( limited liability companies) from the field of private offer to prevent to go against the law (n ° 246) as the share of such companies can only be sold with the agreement of the other partners. To provide the ability to use this technology for SARLs, the Government has recently announced its desire to transform the bill ° 246

  4. Public STO is prohibited.

  5. Any offer of tokens is subject to prior administrative authorization, taking the form of label issued by the Minister of State, after advice from a dedicated Commission. Checking their regularity returns to the agents of the Direction of Economic Development, who can enlist the assistance of all experts, whose technical and IT knowledge could help them in the exercise of their control missions.

  6. It is stated that the bank account related to the offer could either be located on the territory of the Principality of Monaco or set up in a country with the equivalent AML (Against Money laundering) legislation. However, in the future, there will be introduced special measures enabling to remove the possibility of opening an account abroad. To do this, it was proposed, correlatively, to provide within the bill, n ° 991, relating to the establishment of a right to the account, a specific procedure of right to the account within the framework of the offers of tokens, aimed at guaranteeing issuers access to a bank account in Monaco.

  7. It's noted the there are ongoing discussions exploring creature an exchange platform in Monaco, which would constitute a secondary market for tokens.

The document also points on the similarity to the French “PACTE” law of May 23, 2019, in France, giving a new status to digital assets services providers (DASP). To remind, this unprecedented law provides the digital assets broad definition as well as the framework for the regulatory regime depending on the type of Digital Asset Services. Should the entity relates to (i) the Custodian Service, or (ii) the Service of Exchanging Digital Assets and Fiat Currency, it shall be registered with the AMF as a DASP.

Thus, it provides the possibility to creates the ecosystem around the digital tokens.

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Other articles:

Globalisation in transition: the structure of global value chains

How to evaluate the Security Token?

The future of STO

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