Latvia's Economics Minister Viktors Valainis says rules for tokenizing real-world assets could be ready in the first half of 2027, with commercial property as a first step and government bonds on the priority list.
Tokenization creates a blockchain-based representation of an asset or rights to it, allowing ownership to be registered and transferred digitally. Valainis spoke to CoinDesk at the sidelines of the UN:BLOCK fintech conference in Riga, saying his ministry is working with the central bank, the Finance Ministry and industry representatives on a framework intended to make asset tokenization possible in Latvia. The aim is to attract investment to the country.
Valainis points to commercial property as a natural starting point for tokenization, while also mentioning the potential use of cryptocurrency to buy or sell companies or invest in property, without elaborating further. If the framework is in place as planned in the first half of 2027, he hopes the tokenization of property itself could follow in the first part of the following year.
The government has not yet quantified the economic benefit of the plans. Valainis instead makes the case for the changes by pointing to the potential to attract international businesses, investment and tax revenue to Latvia.
Tokenizing Latvian government bonds is also on what Valainis calls the priority list. Volumes and terms have not been disclosed here either, but the minister says he would like bonds to be tokenized in the first part of the year once the framework is adopted.
Latvia has an example to look to in Europe. Slovenia issued a 30 million euro digital sovereign bond in July 2024, as part of an experiment run by the European Central Bank.
The work is already behind schedule. Under the government's action plan, the Economics Ministry was due to complete an assessment of the legal changes needed by October 1. Valainis confirms the assessment is still ongoing.
The timing is complicated by the fact that Valainis's own party won no seats in this month's Latvian election, as the country now forms a new government. The minister says he hopes the work on tokenization rules will continue regardless of who sits in the next government. Neither the Finance Ministry nor the Treasury's press office has answered questions from CoinDesk about the tokenization effort.
The Latvian Blockchain Association, LBAA, takes part in working groups and testing tied to the framework. Valainis named no individual commercial partners in the interview.
Valainis highlights anti-money-laundering controls as a central concern in the work, stressing that the risks need to be understood and managed before new rules are introduced.
"We don't want to create something with a big boom and then with a big collapse," Valainis says. The government, according to the minister, will only roll out solutions it is fully confident are transparent and understandable.
Sources: CoinDesk, Atlabyte, TokenPost
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