How Easy Is It to Act on New Security Token Laws?

David Kemp

Monaco is an exclusive territory and many have heard of it as an area where the elite representatives purchase property and live a luxurious lifestyle. This is partly true, but the country is famous for many other significant features. Monaco is the city-state where some of the most influential laws are passed. However, how easy is it to act on the newly passed security token laws? Major crypto market analysts keep asking the question yet feel doubtful since they cannot yet find a definite and clear answer to it.

Leading mass media sources announced that the government of Monaco has finally passed a new bill. The document introduces the establishment of a security token framework.

The city appeals to millions of tourists. This is the place where you can meet various investors and traders – and there are plenty of different reasons why all these people choose this territory for their vacation as well as business.

Besides being a classy and exclusive area, it is considered to be a hub for individuals who are dealing with the financial sector. That’s where one can meet the most outstanding and creative minds and here the authorities are always interested in improving financial laws and regulations.

The international financial arena cannot exist without Monaco as its top competitor and participant. However, analysts claim that the state does not always feel willing to deploy the most common and traditional financial laws. The country chooses to be independent in its mentality and approach and specialists working there can offer something that surprises the rest of the world.

Home for the Wealthy

Monaco has developed its own strategies and the country applies special tactics to be as influential as it is right now. Not in vain, hundreds of millionaires opt for this city when they need to make investments, establish new partnerships, or perform serious long-term purchases. Last month the local government passed a bill that encompasses and describes new security token offering laws.

The document lays out a legal framework and mentions the most essential points for token offerings. The latter is a kind of fundraising scheme performed by a digital record. To do this, the system allows people to utilize a decentralized register. As a result, this allows participants to create tokens and then sell them in return for payments carried out by investors.

Companies that are located in Monaco can practice a completely legal STO. The bill also provides detailed information about the new STOs and their features. Officials included several important rules:

  • Security tokens are digitized shares that allow the owner to vote, attend meetings as well as receive dividends from the company.
  • Security tokens will be issued by stock companies only. SARL companies will not be permitted to do this procedure.

Even though the above-mentioned points feel reasonable enough, the cost of incorporating a company removes the attractiveness of conducting it in the country. A paid-up share capital of one hundred and fifty thousand euros is required. Besides, there is a requirement of presenting two directors that makes the entire scheme rather challenging for many of those who might feel eager to apply for it. Specialists believe that there will be too few people who would be up for the offer that sounds this demanding.

Moreover, professionals find the concept of the bill is contradictory because token holders won’t be able to publicly offer the tokens. The major difference and benefit of an STO is that this project allows holders to sell tokens across a more general market. This kind of law, according to experts, will achieve too little. Other countries can offer much better conditions and people may refer to Luxembourg, Estonia, and a few U.S. states with the same purposes.

The new bills may feel more like the country’s attempt to demonstrate its readiness to be involved in the secondary market, and yet the authorities do not let companies undertake their own serious STO. Hopefully, the government will review the laws and make them more reasonable for companies willing to raise their capital and for business people who are looking for more advanced and modern methods and approaches.