Monaco government moves to replace 2022 crypto law with MiCA-aligned regulations

Monaco’s government is seeking to overhaul its regulatory approach to crypto-asset service providers by aligning with the European Union’s Markets in Crypto-Assets Regulation (MiCA). A newly introduced bill aims to repeal Monaco’s 2022 digital assets law and modernize the principality’s frameworks for cryptocurrency businesses.

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Bill No. 1131 targets 2022 crypto legislation

In early August, Monaco submitted Bill No. 1131, which, if passed, would invalidate the 2022 law governing digital asset activities in the country. The 2022 regulations had established a fragmented system by categorizing crypto services into two divisions: issuance and operational services, which were overseen by the State Minister, and investment-related services, which required approval from the Commission de Contrôle des Activités Financières (CCAF).

The previous law compelled crypto providers to incorporate within Monaco’s borders and barred foreign firms from directly marketing to local residents. The government now seeks to streamline regulatory oversight and bring rules in line with MiCA, a European Union framework set to standardize crypto-asset regulation across member states.

Should Bill No. 1131 be adopted, companies intending to offer crypto-asset services will need approval from the CCAF. Before receiving this authorization, companies would be reviewed by both the Autorité Monégasque de Sécurité Financière (Monaco’s Financial Security Authority) and the Agence Monégasque de Sécurité Numérique (Monaco’s Digital Security Agency). These organizations play key roles in upholding financial and digital security standards within the principality.

The draft legislation defines the precise activities allowed and sets explicit requirements for company conduct, risk management, and operational professionalism. It also extends the CCAF’s supervisory authority, granting powers to monitor, sanction, and intervene when firms breach compliance requirements—with the stated objective of combating money laundering and related financial crimes.

Government officials asserted that stricter supervision and alignment with EU standards would help reduce financial crime while encouraging credible crypto business activity within the principality.

Mini dictionary: MiCA, or Markets in Crypto-Assets Regulation, is a framework established by the European Union designed to provide harmonized regulatory standards for crypto-asset issuers and service providers across EU member states. It addresses licensing, consumer protection, and money laundering risks in digital assets.

FATF grey listing and EU compliance concerns

Monaco’s decision follows heightened scrutiny from global standard-setting bodies. The principality has appeared on the Financial Action Task Force (FATF) grey list since summer 2024 and was previously identified by the European Commission as a high-risk jurisdiction for money laundering.

Experts signal that adherence to MiCA standards could help Monaco exit these lists, alleviating challenges such as delayed international transactions, increased compliance expenses, and steeper borrowing costs faced by local firms designated as higher-risk.

Authorities acknowledge that international risk designations have tangible economic consequences, from slower fund transfers to restricted access to global markets.

Blockchain analytics company TRM Labs assessed that crypto service providers lacking MiCA authorization show a much higher tendency for severe risk exposure. Their findings emphasize the importance of formal licensing and robust compliance protocols for maintaining trust in the digital assets sector.

Despite MiCA’s introduction, uptake remains modest across Europe: as of recent counts, only 281 out of 1,343 crypto service firms active in the European Economic Area have secured MiCA authorization.

The proposed overhaul underlines Monaco’s intent to establish itself as a credible and compliant jurisdiction for the digital assets industry, strengthening safeguards while pursuing access to global markets.