On 21 December 2017, Monaco’s National Council adopted a draft bill setting out a general experimental framework governing the use of blockchain technology in the Principality, one of the first of its kind internationally.
Blockchain, a new technology, emerged with the creation of Bitcoin in the late 2000s. In addition to its use for cryptocurrencies, the blockchain technology has an infinite number of potential applications.
The banking and financial industry has led the way by creating private blockchain platforms, designed to allow smoother interbank payments and post trade transaction settlements for unlisted securities.
In view of this, the National Council has put forward proposals for minimum regulations on blockchain, to promote the freedom and creativity of Monegasque businesses looking to use this technology.
This draft bill proposes a general framework for blockchain technology, including recognising blockchain content as having evidentiary status. The text also makes provision for two recent blockchain applications, namely smart contracts (e.g. Blockchain Ethereum) and cryptocurrencies (e.g. Blockchain Bitcoin).
Articles 1 to 4 of the text take on the difficult task of establishing a legal definition for some of the technical terms associated with blockchain technology.
The bill also includes a new proposal for a three-year test period for blockchain and its applications in the Principality, during which businesses will see no additional regulatory restrictions.
Another measure included in the bill is the creation of a “Monegasque Blockchain Authority”, tasked with controlling blockchains effects in the Principality, as well as promoting Monaco’s blockchain activities in the international arena.
Finally, Article 12 of the bill identifies some priority sectors for blockchain, such as the issuing of cryptocurrencies, market finance and business finance, or digital intelligence.
It is clear that the bill aims to make Monaco a real testing-ground for future technologies.