Article first published in Forbes Monaco September/October 2020 issue.
As Monaco passes blockchain bill giving STOs legal framework, Frédéric Genta helps drive the country’s financial innovation.
It was nearly two years ago, in November 2018, when Chief Digital Officer Frédéric Genta lead the first meeting of the Monaco Digital Advisory Council, attended by a Who’s Who of the global elite from the public and private sectors. The committee of ten counted Coinbase cofounder Balaji Srinivasan and Hiroshi Mikitani, No. 6 on Forbes Billionaires List with a net worth of $6.4 billion and founder and CEO of Rakuten, Japan's biggest e-commerce retailer.
The Monaco Digital Advisory Council underlines Prince Albert’s ambitious commitment to the country’s digital transition policy, which beyond tackling the economy deals with platforms, telecoms, education, mobility and innovation.
The Security Token Law passed in June 2020 was a natural evolution of this. Bill No. 1491 provides a legal framework for token offerings, a form of fundraising enabled by means of tokens on the blockchain, in return for the down payment made by investors. These Environmental, Social and Governance (ESG) projects will focus on building an ecosystem in the Principality.
“The Law voted by the National Council provides a legal framework that will allow companies wishing to set up in Monaco to raise funds on a secure platform, proposed by Tokeny, in the form of digital tokens,” says Frédéric Genta, who has headed the government’s Digital Transition Office since its creation in March 2018. “These are private offerings aimed more at qualified investors.”
Genta, 39, makes clear that all companies will have to obtain a Security Token Offering (STO) label in order to guarantee that the platform from which the tokens are issued offers a certain degree of security. “The controls carried out on issuers and investors can comply with the obligations required by the fight against money laundering, terrorist financing and corruption.”
Any ESG project will need between €10 million and €30 million of fundraising with a minimum investment of €100,000 and, as Genta emphasizes, “be in line with the values of the Principality, including respect for the environment.”
The first STO candidate is IceBraker, a film production company headed by Oscar-winning documentary maker Luc Jacquet (March of the Penguins). Like all contenders, IceBraker will have to present a white paper detailing, among other points, the characteristics of the tokens issued, the way the offer will be carried out, a risk analysis of the project, as well as information specific to the measures to combat money laundering.
“The white paper will be examined by the STO Commission, which may also call on experts to help analyze the market targeted by the bid,” Genta clarifies.
The Monegasque, who holds an MBA from Harvard Business School and has held several senior positions at Orange, Amazon and Google, both in Europe and the U.S., hopes that a Sovereign Order will be finalized in September so that the Commission can look at the first candidates this fall.
In the meanwhile, secondary market “discussions are underway” with Euronext, the largest stock exchange in Europe, to set up the transfer of tokens. “The procedure is at the heart of the reflections of the government and the National Council,” assures Genta.
Euronext also backs Tokeny Solution, the tokenization platform chosen for Monaco’s STOs. It is the leading European token management and primary issuance European Platform. “The majority of our clients are in real estate and some of the first use cases for STOs have been financing buildings,”says Tokeny Solution CEO Luc Falempin. “The biggest part of private markets is private equity. For the mid-cap, pre-IPO companies it could be interesting, along with private debt, and commodities,” he adds.