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.


KEY TAKE AWAY POINTS

  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