• Economics
  • Politics

A legal framework for token offers

18 June 2020 - 7h37

Long-awaited in the context of the Principality’s digital transition, the bill relating to token offers was approved yesterday by the elected members of the National Council after being examined by the commission for digital development.

What is a token? Franck Julien recalled the definition yesterday in his report: “It is an intangible asset representing in digital format, one or more rights, goods or services, which can be issued, recorded, stored or transferred by means of a digital recording device on a shared register and which, when issued or subscribed, takes on the legal nature of the said right, good or service”.

As it points out, in creating this legal framework, the government is pursuing the clearly stated objective of fostering the development of societies in this new and complex area with the aim of contributing to a new cycle of economic prosperity in Monaco. This ambition, underlines the rapporteur, is part of the digital transition policy desired by the Sovereign and embodied by the Extended Monaco programme which must make digital a lever for growth. It is therefore a question of having a framework for token offers which are fundraising carried out by means of a digital recording device on a shared register and giving rise to token issues in return for the bet of investor funds.


The rapporteur returns to the two categories of tokens, utilities, utility tokens at the heart of the ICO Initial Coin Offering mechanism and security tokens which give rights like stocks, bonds or investment funds, which can therefore be assimilated to financial instruments. This is called security token offering (STO). The latter are experiencing significant growth while ICOs tend to decrease, he continues. Anyway, the government wanted to regulate these two types of fundraising by distinguishing, on the one hand, public offers and, on the other hand, private offers. All must benefit from a label issued by the Minister of State after the opinion of a commission created for this purpose while only companies domiciled in Monaco or in the process of being set up may apply for this label.

Many exchanges between the National Council and the government took place and a consolidated text was finalized on May 13th. Among the many subjects mentioned, the information document and more generally the information of subscribers, guarantees against money laundering, the need for the issuing company (which must be necessarily installed in Monaco) to have or not have an account banking in the Principality.

Exchange platform?

Another debate: the advisability of creating an exchange platform in Monaco which would constitute a secondary market for tokens. In this regard, in his speech, the government adviser-Minister of Finance and the Economy wished to recall “that the organization of such a market in Monaco would be subject to compliance with European regulations in this area and to the creation of a body of rules that does not exist to date in the Principality. However, negotiation can also be envisaged by means of platforms and this is the path which is currently favoured, a reflection being engaged as to the use of the system of bulletins boards. It would allow a security token trading platform to escape qualification as a trading platform according to criteria recently identified by the French Financial Markets Authority.”

The way is now open for this digital development which the Principality expects to generate new jobs and new revenues by allowing the financing of activities themselves innovative.


Franck Julien © Conseil National

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