CoinDesk
Latvia could have rules for tokenizing real-world assets in place by the first half of 2027, with commercial property as a possible starting point and government bonds also on the priority list, Economics Minister Viktors Valainis told CoinDesk at the UN:BLOCK fintech conference in Riga.
"If everything goes smoothly, I think next year, first half of the next year, we will already have the regulation," Valainis said, adding that his ministry is working with the central bank, the Finance Ministry and industry representatives on a framework designed to attract investment. The effort has already slipped once: an assessment of the legal changes, due Oct. 1 under the government's action plan, is "still ongoing," and Valainis's party won no seats in this month's election as Latvia forms a new administration. He expects the work to remain on the next government's agenda.
Why it matters
Latvia is attempting to join a small group of EU states building explicit RWA tokenization frameworks. Anti-money-laundering controls are the central concern, and Valainis framed the cautious pace deliberately: "We don't want to create something with a big boom and then with a big collapse." Members of the Latvian Blockchain Association, whose ranks include Kraken, Backpack EU and airBaltic, participate in the working groups.
The broader agenda extends past tokenization. About 40 companies are seeking MiCA licenses, Latvia is working toward allowing personal taxes to be paid in crypto, and Valainis reiterated his support for a national bitcoin reserve, saying "There is no way that it won't happen. It will happen," while noting a first step would ideally come through a common ECB-level decision.
Market impact
Sovereign bond tokenization would put Latvia alongside Slovenia, which issued a 30 million euro digital sovereign bond in July 2024 as part of a European Central Bank experiment. Valainis said bond tokenization could be done in the first part of next year once rules land. The economic benefit has not been quantified, but the case rests on attracting international businesses, investment and tax revenue.
Frequently asked questions
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When could Latvia's RWA tokenization rules take effect?
Economics Minister Viktors Valainis said regulation could arrive in the first half of 2027 if work goes smoothly, though a legal assessment originally due Oct. 1 is still ongoing.
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Which assets would Latvia tokenize first?
Commercial property is the likely starting point, with tokenized government bonds on the priority list. Valainis said bonds could be tokenized in the first part of next year once rules are in place.
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Which companies are involved in Latvia's tokenization framework?
Members of the Latvian Blockchain Association participate in working groups and testing, including crypto exchanges Kraken and Backpack EU, fintech firms Indemo, Capitalia and Twino, and airline airBaltic.
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What else is in Latvia's crypto agenda besides tokenization?
About 40 companies are seeking MiCA licenses, the government is working toward allowing personal taxes to be paid in crypto, and the economics minister supports a small national bitcoin reserve.
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Has any other European government issued a digital sovereign bond?
Yes. Slovenia issued a 30 million euro digital sovereign bond in July 2024 as part of a European Central Bank experiment, a precedent Latvia would follow if it tokenizes its own bonds.
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