Monaco – Waiting for the ICO legislation

Western countries seek in the digital economy and innovation growth relays that the traditional industry, even financial, no longer offers them. Yet, blockchain technologies and artificial intelligence embody promises of new products, services and financing. These are now seen as the pillars of a disruptive economy producing leverage effects that could upset the current economic order. Nations are therefore embarking on a competition to attract the best projects to their own territory.

In this context, Frédéric GENTA, interministerial delegate in charge of the digital transition of the Principality of Monaco was able to broadly outline the future law on ICO (digital fundraising) on the occasion of the third edition of the MIB (Monaco International Blockchain) on May 7, 2019.

This project grew out of the Sovereign’s will to initiate the digital transformation of the Principality by installing 5G (NB-IoT networks, 5G, Huawei Cloud platform), the commissioning of autonomous vehicles, the creation of a sovereign cloud system, and teaching of programming in primary schools in the Principality[1].
In a conservative approach, the Principality wishes to set a restrictive framework for the use of blockchain technology and ICO’s in its territory. According to Mr. GENTA the plan for  digital fundraising projects in the Principality could be as follows[2]:

  • Project holders and the project should be « a priori » validated by a « committee »
The good standing of the project holders would be verified as well as the adequacy of the project (white paper) within the guiding principles of Prince Albert, namely the environment, the "cleantech", and the "real estate tech".
Mr Genta did not state whether, as in other jurisdictions, the audit of the project would include a technical component regarding the quality of the code, the smart contracts or the effectiveness of legal and financial guarantees in case of the failure of the fundraising or the project. However, this should not be the case, as it appears that we are moving towards a new concept of “ICO Low Tech”, without an exchange and only subscribed in Fiat.
The appointed committee would have a specific deadline to deliver its opinion.

  • The project promoters would then constitute a Monaco legal entity to promote the ICO
After the prior ICO-specific visa, project promoters will be subject to the usual departmental examination to assess the viability which determines the creation of an activity in the Principality for a non-Monegasque citizen.
This is in addition to the time required for the creation of a Société Anonyme Monegasque (SAM) or a Société Anonyme Responsabilité Limitée (SARL), the time required to  open a bank account (which may present significant hurdles given the current reluctance of  banks in Monaco to open accounts for companies linked to blockchain technology, however, if the blockchain technology is not used it could be easier to open the account). Finally possible delays may be incurred to find suitable office accommodation. This procedure could finally resemble that practiced on the creation of the « Multi-family office ».

  • The Monegasque antimoney laundering organization (SICCFIN) would check the origin of the funds raised by the ICO 
This  control  is expected to strengthen the KYC / AML control of the banks receiving the funds. This issue was not considered in the address by the speaker.
From these examples, we can imagine that the first use of the ICO law could be film financing by a panel of investors (excluding US nationals). The funds received (exclusively Fiat) would be deposited in a bank that would carry out the classical KYC AML diligences.
In this context, we do not consider there would be a need for a digital « Exchange » or digital « Custodian » and which would make things easier as it does not seem that these institutions are envisaged in the proposed bill. Indeed, the opportunity to create a Monegasque Exchange (private? sovereign?) is still being debated by the authorities.
If this embodies the standard of the Monegasque ICOs, we wonder whether the Principality has the ability to reach the target of 10 ICOs a year[3].

However, the bill is still shrouded in mystery and it may be a good thing. Listening to these early reflections we have the impression that the ICO law would rather be an opportunity to create a kind of clone of the French SOFICA[4]. But even here we do not see what the technology of distributed registers could really bring to these projects.
Yet, it would be a shame to stop there because Monaco not only has the tools to become the reference ecosystem of distributed registry technologies, but it will above all need  complete legislation to fully deploy its Smart Principality project. Because at the heart of the Smart City, there is the security of personal data and digital sovereignty that only the blockchain can bring.

In order to secure these topics, to qualify the "tokens" and to allow the digital fundraising, a global legislation of the technologies of the distributed registers is necessary.

Such a regulation bringing security and certainty is the pledge of the development of a digital economy. This regulation can certainly aid the installation in Monaco of project promoters and the limitation of ICO projects to a number of defined areas, but it must above all exceed existing international standards and provide sovereign institutions (digital agencies, stock exchange, custodian), professions and regulated activities, but also define the nature and the legal regime of the main elements of this ecosystem.

Of course, the Principality does not need to seduce the world with its 9,259 nationals, 38,800 residents, 50,000 commuters, and more requests for business creation than premises to accommodate. However, we  consider that the parable of Talents also applies to Nations and that Monaco has something special to bring to the Digital World by exploiting its assets and preparing its future.


For more information, please contact Damien Concé, Doctor in Law: or visit or dedicated webiste.
[4] Sociétés de financement de l'industrie cinématographique et de l'audiovisuel (SOFICA) created by a french legislation of July 11, 1985