Latvia targets tokenization rules in 2027 with commercial property in focus

Latvia could have rules for tokenizing real-world assets in place in the first half of 2027, with commercial property as a possible starting point and government bonds on the list as well.

In an interview with CoinDesk, Economics Minister Viktors Valainis said he expected the work to remain on the agenda of the next government as Latvia forms a new administration.

His ministry is working with the central bank, the Finance Ministry and industry representatives on a framework intended to attract investment.

“If everything goes smoothly, I think next year, first half of the next year, we will already have the regulation,” he said, referring to proposed rules for tokenizing real-world assets, in the interview at the sidelines of UN:BLOCK, a fintech conference in Riga.

He also hopes to promote new products and opportunities linked to the cryptocurrency industry early in 2027.

The work has already passed one deadline. Item 20.5 of the government’s action plan gave the Economics Ministry until Oct. 1 to prepare an assessment of legal changes that would enable the tokenization of real estate and other assets. Asked whether it was complete, Valainis said it was “still ongoing.”

Real estate and bonds

Tokenization creates blockchain-based representations of assets or rights to them. Asked where Latvia would begin, Valainis said commercial property would be a “good start,” but also mentioned the potential use of cryptocurrency to buy or sell companies or invest in property, without going into further detail.

Anti-money-laundering controls remain a central concern, he said, describing a need to understand and manage risks before introducing new rules.

“We don’t want to create something with a big boom and then with a big collapse,” Valainis said. The government will implement solutions only when it is “1,000% sure” they would be transparent and understandable, he added.

Members of the Latvian Blockchain Association (LBAA), which aims to make the country a major Web3 hub in the European Union, participate in working groups and testing, according to the minister.

He named no individual commercial partners, though the LBAA’s members include crypto exchanges like Kraken and Backpack EU, as well as fintech firms like Indemo, Capitalia and Twino, and even the airline airBaltic.

Valainis also said the potential economic benefit had not been quantified, but noted his case for the changes rests on attracting international businesses, investment and tax revenue.

Tokenizing Latvian government bonds is also on the “priority list,” he said. Asked how long it would take to tokenize Latvia’s bonds and real estate once the rules were in place, he said: “I would like to say the first part of the next year. It could be done.”

The Treasury and the ministry’s press office have not answered questions CoinDesk sent on the tokenization efforts.

Other European governments have already tested the technology. Slovenia issued a 30 million euro digital sovereign bond in July 2024, as part of a European Central Bank experiment.

Beyond tokenization

Latvia’s broader ambitions were outlined in May 2025. Valainis said about 40 companies were seeking licenses under the European Union’s Markets in Crypto-Assets (MiCA) framework, and cited approvals within a month.

The country's crypto push also includes allowing personal taxes to be paid with crypto.

“We are at the moment working for the first decision to make it happen,” Valainis said, adding that details such as conversion into euros would follow.

Separately, he reiterated his personal support for a small national crypto reserve, without identifying an approved proposal or purchase timetable.

He renewed his call for a national bitcoin reserve during the interview, saying even a small initial holding would show Latvia was moving toward one.

“There is no way that it won’t happen. It will happen,” he said. He favored “some amount which simply shows that you are doing this step,” pointing to examples in the U.S., including companies that have bought bitcoin.

He said a first step should involve “some common decision together” at the European Central Bank level, but added: “I would be the one who would support faster steps.”