Why Latvia Is Starting to Look Like Early Lithuania

If you were setting up a payments business in Europe around 2018, there was a fair chance you spent a few weeks looking at Vilnius. That year Lithuania’s fintech sector grew by 45%, and both Revolut and Google picked up licences from the Bank of Lithuania. By 2019 the central bank was saying Lithuania ranked first in continental Europe for licensed e-money institutions. Founders talked to each other, and the word got around.

Something similar is now happening in Latvia, in Riga, with one difference. This time crypto companies are part of the picture from the beginning. So, is Latvia really repeating the Lithuanian story, or is it simply the next country to describe itself as friendly to fintech? We looked at what the regulators publish, who has been licensed so far, and what happened to Lithuania once its first wave had settled.

When Vilnius was the obvious answer

Lithuania grew fast, and for a fintech starting out Vilnius was the obvious choice. At the end of 2018 the Bank of Lithuania counted roughly 80 licensed e-money and payment institutions. By mid-2019 it was 107, which is quite a jump for six months. The e-money firms on their own went from 12 in 2016 to 87 in 2021, and this in a country with under three million people. It’s hard not to be impressed.

Some of the appeal was down to plumbing. Lithuania’s central bank ran its own payment system, CENTROlink, and that let licensed non-bank firms plug straight into SEPA without begging a commercial bank for access. One licensing guide also praises the regulator for working in clear English. It does add a caveat that’s easy to miss: the legal review period is three months, but the real journey usually takes six to twelve.

Then, around 2021, that trend shifted. Departures started to outnumber arrivals among e-money institutions, and an industry summary of the central bank’s data shows the combined total of e-money and payment institutions falling every year since, from 131 in 2022 to 117 in 2025. Lithuania, however, could not be called a failed hub on that evidence. The regulator began asking more once the market was big, and the country still holds the largest pile of payment licences in the EU, including 70 e-money institutions with an unrestricted licence in September 2026.

Crypto ran on a different clock, and it grew much more quickly. Lithuania never licensed crypto companies in this period, it registered them. Only 8 new virtual asset providers appeared in 2020, then 188 in 2021. By the end of 2022 the Bank of Lithuania was counting 850, and in the same year its own release called for requirements to be tightened immediately. Stricter rules cut the number to about 200 at the start of 2023, but it recovered to 540, which left Lithuania second in the EU behind Poland. When MiCA replaced the national regime, the picture looked very different. By April 2026 only four licences had been issued under it, Robinhood Europe being the first, with CoinGate and Nuvei Liquidity following in December 2025.

The names helped build the reputation along the way. Robinhood picked Lithuania for its first European hub, and its European services still run through a Lithuanian company authorised by the Bank of Lithuania. Choices like those made later applicants feel they were joining a crowd, and in a licensing market that is worth almost as much as a fast process.

The baggage Riga is carrying

Latvia comes to this contest with a past it can’t hide, and the best of its current pitch is built around it. In February 2018 the US Treasury’s financial crimes unit proposed naming ABLV Bank as a primary money-laundering concern. The bank’s activities were suspended and it went into a controlled self-liquidation, and its licence was cancelled in July 2018.

Latvia says the clean-up that followed kept it off the FATF «grey list» and strengthened its supervision. In September 2024 the US unit formally withdrew its 2018 draft decision. It said the Latvian government’s measures had been effective, while also saying its original concerns had been justified. Industry press has described the later MONEYVAL result as a remarkable turnaround for a country that had gone through a series of financial-crime scandals over the previous decade.

Notably, these have to be treated as two separate things. The reform story is credible, since an outside regulator accepted it. The «highly effective system» language from Latvia’s own agencies is the view of the party being assessed. Both matter, because a fintech’s banks and partners will remember 2018 even if the founders have forgotten it.

What Riga is offering now

Start with the supervisor, because it’s different now. Since January 2023 you’d be dealing with the Bank of Latvia (Latvijas Banka) and nobody else, since it took over the old financial markets regulator. One office handles your licence, your anti-money-laundering checks and the ongoing oversight.

Read the central bank’s fintech pages and you’ll think of Lithuania a few years back. You can book time with its experts before you’ve filed a thing. There’s an Innovation Hub for questions about how a new product fits the rules, and a sandbox if nobody has written the rules yet.

The most concrete piece is payment access. From 17 October 2024, licensed payment and e-money institutions could connect directly to EKS, the central bank’s clearing system for SEPA payments. The first Latvia-based non-bank to do so was the e-money institution xpate, in April 2025. At its 2025 fintech forum the central bank said seven companies had already used the option and more than ten were in the pipeline. An adviser’s 2026 note counts 13 participants, three of them Latvian institutions and ten licensed in other EU countries. That last figure matters, because it shows the system is already used by firms that aren’t based in Latvia.

The same speech lists the rest of the offer: a pre-licensing process for crypto firms, more than 15 firms under review at the time, and a 0% tax rate on reinvested profits.

Crypto is the new part

This is where Latvia and early Lithuania really part ways. Lithuania built its name on payments and ran crypto through a national registration regime. Latvia came to crypto through MiCA, the EU’s crypto regulation, so every licence it issues is a full authorisation that works across the EU. Latvijas Banka began accepting applications on 2 January, days after MiCA became fully applicable.

The first licences came slowly. On 3 December 2025 the Bank’s supervisory committee issued the first one, to BlockBen, and it followed on 10 December with Nexdesk. Paybis, Neverless and Backpack EU’s operator, Trek Technologies, arrived in May 2026, which made five by the end of that month. By early September the register held ten. On 1 October the Bank announced two more, Noah LV SIA and Atrya Technologies, which made 12.

Two things stand out. The licence holders are mostly crypto-native firms, with no banks among the first ten, and several already passport into other countries. A Latvian licence is therefore not only a permit to serve Latvian customers but a base for serving most of Europe. And the line between crypto and payments is blurring. Noah took a payment institution licence alongside its crypto one, and Neverless received a payment licence on the same day.

The route in is published on the central bank’s website. The applicant must be a legal entity with its registered office and place of effective management in the EU, and at least one person in the governance must be based in the EU. The bank offers a familiarisation meeting to discuss the planned activity before filing, and it helps applicants prepare at no charge. Once the file is in, the bank has 25 working days to check it is complete, and MiCA then gives the regulator 40 working days for the assessment. The reported review fee is €2,500.

Capital depends on the service. The smallest class needs €50,000 in initial capital, and the heavier ones need more. Against the cost of running a real crypto business, those amounts are small. Staff, compliance systems and legal help will cost far more than the regulator does.

Time is what catches people out. The legal deadlines only cover the formal review. Advisers disagree about the real total: one says three to six months is typical, others say a year or more. The clock doesn’t start until the file is complete, and the slow part is usually inside the applicant’s own company, where someone has to set it up, write the policies and hire the people. If you plan around the 65 working days, you’ll be late.

The familiarisation meeting is worth treating as a test, not a formality. Bring the real business model, the real ownership structure and the real list of services. It is much cheaper to change a plan before filing than after.

Payments, the quieter half

Lithuania’s volume came from payments, and Latvia has its own version that gets far less attention than crypto. It’s small. In July 2026 the Bank of Latvia counted 12 licensed e-money institutions, one registered one, and 10 licensed payment institutions. Lithuania has 70 e-money institutions with an unrestricted licence, so the gap in e-money alone is obvious.

What’s more telling is the pace. Four e-money licences had been issued by July 2026, against three in the whole of 2025. Five payment licences came in the same period. Six months have already beaten a full year, even if the starting point was low.

The two main licences do different jobs. A payment institution moves money for customers, while an electronic money institution can also issue e-money and hold balances for them. A company that only sends and receives payments for clients may find the payment licence enough. One that wants customers to keep money in an account, or to issue a card or a wallet, will usually need the e-money licence, which is also the heavier one on initial capital.

The US-listed wallet company Exodus Movement has announced it is buying TigSiPay, a Latvian licensed e-money institution, which requires a change-of-control notification to the regulator. When buyers start paying for existing licences, it usually means the licence is seen as an asset worth owning. Lithuania began sending that signal a few years earlier.

One more product matters for the comparison. Latvia introduced a specialised credit institution licence in January 2026, a route to a bank with a narrower scope and a much lower capital requirement than a full bank, reported at as little as €1 million. Lithuania’s specialised bank licence was Revolut’s first step. A payments company that grows quickly and later wants a bank will look for a country where the whole ladder is on offer, from a payment licence to e-money to a bank.

What Lithuania’s cycle suggests

Lithuania shows how this usually goes. As the market grew, the Bank of Lithuania wanted more from applicants who actually operate in the country. One licensing guide lists a management board of three plus a CEO, an AML officer and control functions on the ground, and says crypto firms faced higher capital and resident-officer requirements. The central bank had asked for tighter crypto rules in 2022, when the register hit 850. By early 2023 about 200 were left, and under MiCA only four licences existed by April 2026.

Regulators who let many in tend to tighten once the first thin applications have tested the system. Latvia already asks for some presence, since an adviser says virtual offices are banned and a physical office, an AML officer and at least one EU-resident board member are expected. It hasn’t yet gone through the tightening Lithuania did, and I can’t say whether it will. It does have a supervisor that lived through ABLV in 2018 and seems set on avoiding a repeat, so the tightening could arrive earlier.

Is Latvia the next Lithuania?

Not yet, and probably not at the same scale for a while. Latvia has 12 MiCA licensees, 12 licensed e-money institutions and 10 licensed payment institutions, against Lithuania’s 70 unrestricted e-money licences. The ingredients do look alike: a small central bank that will talk before you apply, direct access to payment rails and a published route in. The difference is the starting point. Latvia built on MiCA from the first day, so its early licensees are mostly crypto-native firms, while Lithuania’s were payment companies.

Two things could shift this fast. One is the pipeline. An adviser’s 2026 note puts 15 firms in formal licensing and 29 more in pre-licensing talks, which makes about 44 live projects. Treat that as indicative, not official, though the central bank’s own 2025 remark about more than 15 crypto firms under review points the same way. The other is the specialised bank licence. If payment firms take it up, Latvia gets the full ladder that took Lithuania years to build.

Whether Latvia is a serious option depends on how its supervisor behaves once more applicants arrive. For a company looking at Riga, the early meeting with the Bank of Latvia is the best way to find out what that supervisor will actually expect.