Latvian central bank plans to provide future crypto services

The Council of Latvijas Banka, the Latvian central bank (LB) has approved an initiative that will enable non-bank payment service providers – payment and e-money institutions – and in the future also crypto-asset service providers to open an account with Latvijas Banka for the segregation of their customer funds, LB said in a release December 15.

Likewise, Latvijas Banka will provide non-bank payment service providers with the possibility to directly participate in its Electronic Clearing System (ECS).

However, only crypto companies that comply with new EU regulations will be able to use the services.

"It is planned that the possibility to open an account for separate holding of customer funds in euro with Latvijas Banka will be provided to payment and electronic money institutions licensed within the single market of the European Econmic Area (EEA) and to crypto-asset service providers licensed in accordance with the European Union's Markets in Crypto-Assets Regulation," LB said.

"The segregation of customer funds is one of the key licensing requirements for payment and e-money institutions, as well as for crypto-asset service providers. Providing these institutions with the possibility to open an account with Latvijas Banka will strengthen the protection of their customers," LB said.

Latvijas Banka and the Ministry of Finance have agreed on the necessary changes in the national regulatory framework.

Latvijas Banka is planning to start introducing the services "already this year to bring them to the market starting from June 2024 if changes in the national regulatory framework will be approved during this time."

A secure and developed financial sector is one of the strategic priorities of Latvijas Banka, the institution said.

The EU's Markets in Crypto Assets Regulation (MiCA) entered into force in June 2023.

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