The government of Monaco has formalised a Memorandum of Understanding with Tokeny Solutions as its technology provider to support the issuance of tokenised financial instruments.

The Luxembourg-based fintech, that is currently setting up a subsidiary in Monaco, and its range of blockchain-based solutions, will allow the Principality to apply control and compliance to the Ethereum blockchain. The initiative will support Monaco with its upcoming regulatory framework to become the world’s first state utilising the benefits of decentralised finance (DeFi). Monaco’s aim is to become a Funding Nation for progress, a global market where quality projects are developed and financed. To qualify, the projects will require a mandatory label issued by the Ministry of State.

Tokeny Solutions CEO, Luc Falempin, said: “The lack of high quality tokenised assets has been a stumbling block in the tokenisation industry. With the mandatory label, projects selected by the Principality of Monaco will be easily recognised by investors as serious and quality investment opportunities. Then, the rights of investors will be guaranteed by their onchain identity. For the issuer, AML and KYC will be automatically enforced in any transfer.”

The Principality of Monaco has passed a bill and a favourable regulatory framework to encourage projects from around the world to finance themselves through issuing tokenised securities. The framework will thus aim to protect investors and project owners through quality control of the issuing companies and of the investors. The complete regulatory framework is expected to come into force shortly.

Frederic Genta, in charge of Digital Affairs in Monaco, said: “Monaco is moving towards its ambition to become a funding nation for progress with our STO framework. Two key milestones were achieved; a dedicated STO law was voted by the National Council and we are welcoming Tokeny to the Principality to operate our STOs.”