The central bank of Latvia, Latvijas Banka, has announced free pre-licensing consultations for crypto-asset service providers looking to pursue the EU MiCA license – the new EU-wide united license and legal framework for the crypto-asset industry.

Latvijas Banka will begin accepting applications and issuing operating permits starting January 2025, when the MiCA license will go into effect.

Latvijas Banka has developed both licensing and pre-licensing processes to provide the best possible support for innovators in the financial sector. The pre-licensing process offers individual consultations with Latvijas Banka experts, ensuring guidance on the viability of applications, regulatory compliance, and document readiness. Latvijas Banka emphasizes accessibility and responsiveness, ensuring prompt, human-centered communication with an average response time of 48 hours.

The pre-licensing process is aimed at reducing a service’s time-to-market, thus reducing service down-time after the regulation is enacted. Similar pre-licensing consultations in other verticals offered by Latvijas Banka have made it possible for companies to reduce their time to obtain a license down to 3 months.

“Latvia hosts a regulatory environment that is open to innovation, aligned with EU standards, and committed to fostering a fintech-friendly business environment. Latvijas Banka has created a framework that balances flexibility with responsibility. Our efforts focus on streamlining licensing processes and reducing barriers to entry. Our dedicated team offers personalized, rapid support prioritizing direct, professional feedback within hours rather than months-long waits.”

Santa Purgaile, deputy governor of Latvijas Banka.

Approved cryptoasset service providers will pay a supervision fee of only 0.6% but not less than 3000 eur annually. A license from Latvijas Banka provides the opportunity to scale fast across the EU market and passport the services cross-border.

The initiative reflects a recent decade-long overhaul of the financial sector in Latvia, resulting in the development of a state-of-the-art AML regime, and placing a focus on support for financial innovators. Latvia has some of the best-certified financial services talent, with around 1% of the population working in the finance sector, making it possible to not only find talent to work with, but also collaborate with at state institutions.

In addition to an available and responsive team of expert consultants, an EU-wide license, and a competitive 0.6% supervision fee, Latvia offers a variety of benefits to make fintech companies’ lives easier. Those include:

• Regulatory Sandbox – an environment provided by Latvijas Banka where innovative services can be tested in relation to existing regulations, to verify compliance and viability, encouraging the development of new financial services products.
• Innovation Hub – fintechs are able to apply for free advice from Latvijas Banka experts in areas related to their industry’s legislation, regulation, licensing, IT security, AML, and more.
• Startup support – Latvia’s startup law offers a variety of support mechanisms, including the Startup Visa for foreign founders, lowered social tax rates, waived income tax, and 45% salary co-financing for highly qualified employees.

More information on the pre-application process can be found here. Latvijas Banka has also developed guides for obtaining authorisation to provide crypto-asset services and issue tokens. Companies considering applying are invited to contact Latvijas Banka experts through the Innovation Hub application for a free consultation.