Luxembourg-based fintech opens subsidiary in Monaco and partners with Principality to support country’s issuance of tokenized financial instruments.

Monaco has appointed Tokeny Solutions as its government’s tokenization platform, the Luxembourg-based fintech announced on 25 june in a press release, after both partners signed off a Memorandum of Understanding.

Tokeny, which is now setting up a subsidiary on the Rock, will support the Principality in its issuance of tokenized financial instruments, by operating its security token offering.

Blockchain-based solutions

The country recently passed a bill to implement a regulatory framework that will encourage projects to finance themselves through issuing tokenized securities, via an Initial Coin Offering mechanism.

Tokenized securities will be assimilated to financial instruments such as stocks, bonds or investment funds.

The framework aims to protect investors and project owners, through a quality control on issuing companies and investors. Tokenization projects will require a mandatory label issued by the Ministry of State.

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 complete regulatory framework is expected to come into force shortly. The new legislation follows Monaco’s digital transition objectives.

With its regulatory framework the country will “become the world’s first state utilizing the benefits of decentralized finance (DeFi)”, explained Luc Falempin, the CEO of Tokeny Solutions. “Our range of blockchain-based solutions, will allow the Principality to apply control and compliance to the Ethereum blockchain”.

IceBreaker onboard

Capital raised through the platform will focus on environmental impacts. The framework “embeds clear ESG components and enables sustainable finance”, Falempin added.

According to Tokeny’s press release, IceBreaker will be the capital raiser on Monaco’s tokenization plateform. The production company owned by documentary filmmaker Luc Jacquet intends to finance content production with the funds,

Founded in 2017, Tokeny Solutions has specialised in the digitisation of financial assets. The startup helps financial actors launching in private markets to compliantly issue, transfer and manage securities via the blockchain technology, while enabling them to improve their asset liquidity.

In July 2019, Euronext, the pan-European exchange platform subscribed the entire €5 million capital increase of Tokeny, in exchange for a 23.5% stake.

Silicon Luxembourg, July 2020