Monaco has introduced a draft bill to replace its 2022 cryptocurrency regulations, aiming to align the Principality’s framework with the European Union’s Markets in Crypto-Assets (MiCA) regime and Financial Action Task Force (FATF) standards. The proposal seeks to modernize oversight of crypto-asset service providers and strengthen anti-money laundering and consumer protection measures.
Evolving Beyond the 2022 Framework
The government submitted the bill to the National Council to overhaul the existing rules governing crypto-asset activities. The initiative reflects rapid changes in digital asset markets and the need for a clearer, more comprehensive framework for companies operating in or from Monaco.
Alignment With MiCA and FATF
MiCA is the EU’s comprehensive rulebook for crypto assets and service providers, establishing authorization, conduct, disclosure, and investor protection requirements across the bloc. FATF standards set global anti-money laundering and counter-terrorist financing benchmarks for virtual asset activities.
By aligning with these regimes, Monaco is positioning its market and participants to operate under standards consistent with major international jurisdictions. Areas typically addressed under MiCA and FATF include:
- Authorization and supervision: Licensing and ongoing oversight of crypto-asset service providers (CASPs).
- Consumer and market integrity rules: Conduct of business standards, disclosures, and safeguards for custody and conflicts of interest.
- Stablecoin oversight: Requirements for issuers of asset-referenced tokens and e-money tokens, including governance and reserves.
- AML/CFT compliance: Enhanced due diligence, transaction monitoring, and implementation of the FATF Travel Rule for transfers.
Implications for Firms and Investors
If enacted, the new framework would provide greater regulatory clarity for firms seeking authorization in Monaco and for those interfacing with EU markets. Enhanced alignment is intended to improve investor protections, reduce regulatory fragmentation, and support cross-border compliance for service providers.
Next Steps
The draft bill will proceed through the legislative process in the National Council. Further details on supervisory implementation and potential transition timelines are expected following parliamentary debate and adoption.