Latvia could introduce rules for real-world asset tokenization as early as the first half of 2027, according to Economy Minister Viktors Valainis, who said commercial real estate may be the first use case and government bonds are also on the priority list.
Valainis made the comments in a CoinDesk interview published on Oct. 25. The interview took place on the sidelines of the UN:BLOCK fintech conference in Riga, the Latvian capital.
Minister says the framework could be ready in the first half of next year
"If everything goes smoothly, I think next year, in the first half of next year, we will have this set of rules," Valainis said.
He said the Ministry of Economics is working with the central bank, the finance ministry and industry representatives to design the framework, with the stated goal of attracting investment. Latvia is currently forming a new government, and he said he expects the work to remain on the next administration's agenda.
The process has already missed one deadline. Under item 20.5 of the government's action plan, the Ministry of Economics was supposed to complete an assessment by Oct. 1 explaining which laws would need to be changed to allow the tokenization of assets such as real estate. When CoinDesk asked whether that assessment had been completed, Valainis said it was still in progress. Latvia's Treasury and the ministry's press office did not respond to CoinDesk's questions.
Commercial real estate seen as a starting point, with government bonds also listed
Asked where the effort should begin, Valainis said commercial real estate would be a "good start." He also said crypto could potentially be used to buy and sell companies or invest in real estate, though he did not give details.
Tokenized government bonds are also on the "priority list." Asked how soon public debt and real estate could be tokenized once the rules are in place, he said: "I would say the first half of next year, it can be done."
Valainis said anti-money laundering remains a core issue and that the government wants to understand and control the risks before introducing new rules. "We don't want to create something that first has a huge boom and then a huge collapse," he said. He added that the government wants to be "1,000% sure" the model is transparent and understandable before it is implemented. The economic benefits have not yet been quantified, he said, though he pointed to international companies, investment and tax revenue as the rationale.
Blockchain association members joined the working group, and Europe already has an example
Valainis said members of the Latvian Blockchain Association have taken part in the working group and testing, though he did not name specific partners. CoinDesk said the association's members include exchanges such as Kraken and Backpack EU, as well as airBaltic.
Europe has already seen similar experiments. The report noted that Slovenia took part in a European Central Bank experiment in July 2024 and issued €30 million in digital sovereign bonds.
About 40 companies are applying for MiCA licenses, and the minister backs a Bitcoin reserve
Valainis said about 40 companies are currently applying for licenses in Latvia under the European Union's Markets in Crypto-Assets regulation, or MiCA. He also said the government is working on allowing people to pay personal taxes with cryptocurrency. "We are working toward the first decision," he said, adding that details such as conversion into euros would be decided later.
He also repeated his personal support for a small national Bitcoin reserve, while giving no indication that any proposal had been approved or that a purchase schedule had been set. "It is impossible for it not to happen. It will happen," he said. In his view, the first step should be a "joint decision" at the European Central Bank level, though he added: "I would be the one supporting moving faster."
