Monaco's government has submitted a bill to replace its 2022 crypto regulatory regime with a new licensing framework that would place crypto-asset service providers under stricter authorization, governance, and compliance requirements. The proposed legislation is designed to bring the Principality's crypto rules closer to the European Union's Markets in Crypto-Assets Regulation and standards developed by the Financial Action Task Force.
The government's Bill No. 1131 was formally submitted to Monaco's National Council on August 6, setting out a new framework that would give Monaco's financial regulator a larger role in approving and supervising companies offering crypto services.
A CCAF-Led Licensing System
Under the proposed framework, companies seeking to provide regulated crypto-asset services would need prior authorization from the Commission de Controle des Activites Financieres, Monaco's financial regulator. The bill more precisely defines the crypto services that can be provided in Monaco and adds requirements covering corporate governance, prudential safeguards, and professional conduct.
Before a license can be issued, applications would undergo reviews involving multiple Monegasque authorities. The financial security authority would assess relevant financial-security matters, while the digital security agency would participate in the review of cybersecurity requirements. This multi-agency approach ensures that crypto service providers are evaluated across all relevant risk dimensions.
Replacing the Two-Track System
Monaco's existing rules date to a law adopted in July 2022 that regulated companies providing services involving digital assets. Rather than placing all regulated crypto services under one authorization structure, the law separated providers according to their activities. Companies involved in digital asset issuance needed approval from the Minister of State, while businesses providing investment services fell under the financial regulator.
The new bill would reorganize that structure around a more clearly defined and unified authorization process. The existing law also established local presence requirements and restricted foreign providers from approaching residents through unsolicited marketing. The new framework is expected to build on those provisions while adding the stricter oversight mechanisms aligned with MiCA.
The FATF Grey List Pressure
The proposed legislation comes as Monaco remains subject to increased scrutiny over its anti-money laundering controls. The Financial Action Task Force continues to include Monaco among jurisdictions under increased monitoring, commonly known as the FATF grey list. The European Union also classifies Monaco as a high-risk third country for money laundering and terrorist financing controls.
These designations create real consequences for Monaco's financial industry. Being on the FATF grey list can discourage international investment and create compliance burdens for companies doing business with Monegasque entities. The new crypto framework is part of Monaco's broader effort to demonstrate that it has adequate controls in place to exit the grey list.
Aligning With MiCA
The proposed framework would bring Monaco closer to the authorization-based approach used under MiCA, even though the Principality is not a European Union member state. Under the EU framework, crypto-asset service providers must obtain authorization before providing regulated services and comply with requirements covering governance, client protection, prudential controls, and conduct.
This alignment is particularly important because MiCA's transitional arrangements ended on July 1, leaving crypto firms subject to the bloc's full licensing requirements. Firms operating in or near EU markets now face a more rigorous regulatory environment, and Monaco's alignment with MiCA standards would make it easier for Monegasque crypto companies to operate across European borders.
The Global Regulatory Trend
Monaco's proposed framework is part of a global trend of jurisdictions updating their crypto regulations to align with international standards. From Hong Kong's stablecoin framework to the EU's MiCA, regulators are moving toward licensing-based systems that impose stricter requirements on crypto service providers. Monaco's bill, if adopted, would place the Principality among the jurisdictions that have taken concrete steps to align with those standards.
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