Monaco Moves to Overhaul Crypto Rules With MiCA-Aligned Framework

Monaco is moving to overhaul its digital asset regulatory framework as the government seeks to introduce stricter licensing, governance and compliance requirements for companies providing virtual asset services.

The government has submitted Bill No. 1131 to the National Council, proposing to replace key elements of the regime introduced in 2022 with a more comprehensive licensing framework for digital asset service providers.

The proposed legislation would bring Monaco's rules closer to the European Union's Markets in Crypto-Assets Regulation (MiCA) and standards established by the Financial Action Task Force (FATF), despite Monaco not being an EU member.

Monaco Raises the Bar for Digital Asset Licensing

Under the proposed framework, companies seeking to provide regulated digital asset services would need to obtain prior authorization from Monaco's Commission de Contrôle des Activités Financières (CCAF).

The bill would also establish a clearer definition of the activities subject to regulation while introducing additional requirements covering corporate governance, prudential safeguards and professional conduct.

Regulatory scrutiny would therefore extend beyond the services a company offers to include its organizational structure, management and operational controls.

Applications would also undergo review by other Monaco authorities before authorization is granted. The Financial Security Authority would assess financial security matters, while the Digital Security Agency would be involved in evaluating cybersecurity requirements.

Once a license is granted, CCAF would receive broader supervisory and enforcement powers, strengthening ongoing oversight rather than limiting regulatory scrutiny to the initial authorization process.

Monaco Moves Closer to the MiCA Model

The proposed framework would bring Monaco closer to the licensing approach established under MiCA, which requires crypto-asset service providers operating within the EU to obtain authorization and comply with rules covering governance, client protection, prudential safeguards and professional conduct.

MiCA has significantly changed the regulatory landscape for crypto companies operating in Europe, particularly as transitional arrangements have come to an end and firms have faced increasing pressure to obtain full authorization.

Although Monaco operates outside the EU regulatory system, aligning more closely with MiCA could make its digital asset framework more compatible with the standards increasingly adopted across European financial markets.

Bill No. 1131 Would Replace Monaco's Existing Framework

Monaco's current digital asset rules date back to Law No. 1.528, adopted in July 2022 to establish requirements for businesses providing services related to digital assets.

The existing framework divides providers according to the activities they perform. Companies involved in issuing digital assets and certain operational services require authorization from Monaco's Minister of State, while investment-related digital asset activities are subject to separate regulatory requirements.

The law also established local-presence requirements, meaning companies seeking authorization must establish an entity registered in Monaco before providing covered services.

Foreign providers face additional restrictions, including limitations on unsolicited marketing directed at Monaco residents, preventing offshore firms from actively targeting local customers without meeting domestic requirements.

Bill No. 1131 would consolidate these rules into a clearer framework defining regulated activities while bringing governance, financial safeguards and conduct obligations into the licensing process.

Europe's Tougher Crypto Rules Are Reshaping the Market

Monaco's proposed changes come as MiCA continues to reshape the European digital asset industry.

The EU framework provides licensed crypto-asset service providers with a harmonized regulatory structure that can allow them to operate across member states while remaining subject to licensing, governance, operational and compliance requirements.

According to data from the European Securities and Markets Authority (ESMA), the number of authorized firms increased sharply around the end of the transitional period, reaching approximately 300 companies by July 3, after 57 additional providers were added ahead of the July 1 deadline.

Among the firms receiving licenses that allow them to benefit from MiCA passporting rights are Standard Chartered and FalconX.

Regulatory scrutiny has also expanded beyond licensing. In July, ESMA began supervisory reviews of certain MiCA-authorized crypto-asset custodians, focusing on areas including custody controls, private-key management, incident response and risks associated with third-party service providers.

Monaco's proposed framework similarly gives CCAF stronger powers to supervise providers after they receive authorization.

FATF Pressure Adds to Monaco's Regulatory Challenge

The proposed reforms also arrive against the backdrop of increased international scrutiny of Monaco's anti-money laundering and counter-terrorist financing framework.

The FATF placed Monaco under increased monitoring, commonly referred to as the grey list, in June 2024, requiring the principality to address identified strategic deficiencies within agreed timelines.

Monaco remained under increased monitoring until February 2026.

The regulatory pressure extended beyond FATF. In June 2025, the European Commission added Monaco to its list of high-risk third countries for anti-money laundering purposes, with the classification taking effect on August 5, 2025.

Under EU AML rules, entities subject to the framework must apply enhanced due diligence to transactions involving high-risk jurisdictions.

Such requirements can increase the compliance burden, time and costs associated with transactions involving counterparties in jurisdictions subject to heightened scrutiny.

Detailed Rules Still to Come

If the National Council approves Bill No. 1131, Monaco will subsequently introduce secondary regulations setting out the technical and practical requirements companies must meet.

The legislation would therefore establish the overarching legal framework, while implementing rules would provide more detailed guidance on how the new licensing and compliance regime will operate in practice.

Monaco Repositions Its Digital Asset Market

The proposed legislation represents more than an update to Monaco's existing crypto rules. It signals an attempt to reposition the principality within Europe's increasingly regulated digital asset landscape.

As MiCA raises regulatory standards across the continent and international scrutiny of AML controls intensifies, stronger licensing requirements could help Monaco attract institutional-quality digital asset businesses and financial firms.

The challenge will be finding the right balance.

For Monaco, a more rigorous framework could strengthen market credibility and regulatory alignment. But if compliance requirements become too burdensome, the principality could also risk pushing digital asset companies toward jurisdictions offering greater flexibility.

The outcome of Bill No. 1131 could therefore play an important role in determining whether Monaco becomes a more credible destination for regulated digital asset businesses or a more restrictive market within Europe's evolving crypto landscape.