Latvia’s Central Bank Offers Pre-Licensing Consultations for Cryptocurrency Firms
Date: 2024-09-10 Author: Gabriel Deangelo Categories: IN WORLD
In response to the phased implementation of the European Union (EU) Markets in Cryptocurrency Regulation (MiCA), the Central Bank of Latvia has introduced a pre-licensing service for local crypto asset service providers (CASPs), as stated in a press release on August 29.
As part of Latvia’s efforts to align with MiCA, this initiative provides free consultations to companies wishing to operate under the new regulation, helping them prepare for the formal licensing process that will begin in January 2025.
Details of the Central Bank of Latvia’s Pre-licensing Consultation for Cryptocurrency Companies
The Central Bank of Latvia’s Pre-licensing Consultation Program aims to support cryptocurrency companies by providing expert advice on regulatory compliance, documentation preparation, and licensing readiness assessment.
Companies interested in obtaining MiCA-compliant licenses can request an unlimited number of consultations. This allows them to clarify regulations, address compliance issues, and be fully prepared before formally submitting applications in 2025.
In addition, the central bank’s experts will provide tailored advice to ensure CASPs meet the required regulatory standards under MiCA.
This proactive measure aims to simplify the transition for companies, allowing them to confidently enter the Latvian market.
The Latvian Blockchain Association has also expressed strong support for the pre-licensing initiative.
Rainis Znotins, the association’s executive director, emphasized the importance of a smooth transition to help local CASPs navigate the new regulatory landscape.
By creating a supportive environment for CASPs, Latvia is positioning itself as an attractive destination for crypto companies within the European Union.
Growing Crypto Market and Regulatory Environment in Latvia Pre-licensing consultations in Latvia are part of a larger initiative to develop a sustainable crypto ecosystem.
In June 2024, the country passed the Crypto Asset Services Act, providing a clear regulatory framework to support the growth of blockchain and crypto companies.
In addition, Latvian authorities have taken a tough stance on compliance.
In July, the country’s financial crimes unit fined crypto payment service provider Payeer $10 million for violating EU sanctions related to Russia.
The Central Bank of Latvia is also integrating artificial intelligence (AI) and cloud technologies into its operations, further aligning with the EU’s overall digital finance strategy.
However, the Latvian crypto market will also face some challenges in the future.
In August 2023, the Central Bank released a survey that showed a significant decline in investment in crypto assets — by 50% over the past year.
The survey attributed this decline to several factors, including cases of fraud and bankruptcy of large market participants, misinvestments, and concerns about cryptocurrencies’ links to money laundering.
The survey, based on payment card usage data, found that only 4% of the Latvian population had purchased crypto assets in February 2023, compared to 8% in the same period in 2022.
