The principality of Monaco has just announced that it is going to allow up to 15 government- approved Security Token Offerings (STOs) p.a., raising $15 to $200million each.

The first STO is to raise $50m for a film production company called Icebreaker (which made the TV documentary ‘March of the Penguins’). Investors in the STO will receive a share in the income from Icebreaker’s future productions, which will include new films. Daniel Coheur, Chief Commercial Officer at Tokeny, said, “The IceBreaker project is to allow the production company to retain all the content rights. Antartica, the exhibition that was organised to support the movie, made much more money that the movie itself. IceBreaker has signed agreements with museums to organise these exhibitions around the globe. It is just one way how IceBreaker intends to monetise its content to create more value for investors”.

Monaco is not known as a financial centre, but more of a playground and tax shelter for the rich - no income tax for residents, but a 20% sales tax/VAT on those goods and services bought within Monaco. So, this announcement, although surprising, clearly demonstrates the interest in this new asset class and is surely to be welcomed by businesses looking to raise capital (especially in the increasing poor economic back drop given the challenges due to Covid-19). The Monaco STOs are required to have an Environmental Social and Corporate Governance (ESG) angle, following a growing trend in asset management circles that ESG must be a prerequisite for investors to be accepted. This is evident with the giant fund manager, Blackrock, which will only invest in companies that are able to demonstrate their commitment to ESG.

Monaco has teamed up Tokeny to issue the STOs, with Tokeny, itself, being 24% owned by Euronext (Europe’s biggest stock exchange). Therefore, one wonders how long will it be before we start to see Euronext converting itself to enable the trading of digital assets that a STO creates so they can be bought and sold 24/7. The digital assets sector was given a further boost last month when Monaco’s neighbour France announced the second Initial Coin Offering (ICO) approved by the French financial services regulator under its new ICO Visa scheme. Given that, back in April, the SEC approved a Blockchain-based Security Token trading platform, no doubt the powers that be in Hollywood will study Icebreaker. Should Icebreaker be successful in raising film finance, no doubt Hollywood film executives will want to follow Monaco’s lead. STOs and properly regulated ICOs not only offer companies an alternative way to raise capital, but also the promise of jobs and additional tax revenue for governments, both of which will be sorely needed over the coming months.