Issuing electronic money tokens

Published: 18.07.2024 Updated: 13.08.2024

How to obtain authorisation to offer an electronic money token or request its admission to trading?

Regulation (EU) 2023/1114 classifies crypto-assets into three types, which should be distinguished from one another and subject to different requirements depending on the risks they entail. The classification is primarily based on whether the crypto-assets seek to stabilise their value by reference to other assets.

More detailed information on the classification of crypto-assets

An electronic money token ('e-money token') means a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency. In this case, an official currency means the official currency of a country that is issued by a central bank or another monetary authority.

Regulation (EU) 2023/1114 does not apply to several cases such as when crypto-asset services are provided in a fully decentralised manner, i.e. without any intermediaries, or involve individual crypto-assets such as NFTs (crypto-assets that are unique and non-fungible). For a detailed list of exceptions, please see Article 2 of Regulation (EU) 2023/1114.

Only the credit or e-money institution that has notified Latvijas Banka of the crypto-asset white paper and has published it in accordance with Article 51 of Regulation (EU) 2023/1114 is permitted to issue an e-money token and offer it to the public or seek its admission to trading.

The issuer of an e-money token must notify Latvijas Banka of its intention to offer the e-money token to the public or seek its admission to trading at least 40 working days in advance. The process is similar to that followed by the existing financial market participants when they notify Latvijas Banka of significant changes in the services provided under the licence or authorisation they have already obtained.

Exceptions

1. The aforementioned requirements do not apply to the issuers of e-money tokens that benefit from the waiver provided for in Article 9(1) of Directive 2009/110/EC.

2. Title IV of Regulation (EU) 2023/1114 does not apply to the issuers of e-money tokens that benefit from the waiver in accordance with Section 3, Paragraph one, Clauses 10 and 11 of the Law on Payment Services and Electronic Money (Article 1(4) and (5) of Directive 2009/110/EC).

If the aforementioned exceptions apply, the issuers of e-money tokens must produce the crypto-asset white paper in accordance with Regulation (EU) 2023/1114 and submit it to Latvijas Banka 20 working days prior to its publishing. Latvijas Banka does not require the crypto-asset white paper to be approved prior to its publication.

The issuer describes any important new aspects, significant mistakes or imprecisions that may affect the valuation of the e-money token in the crypto-asset white paper. This is then submitted to Latvijas Banka and published on the issuer's website.

Costs

No additional costs associated with reviewing the application for authorisation to issue e-money tokens are involved. The volume of the crypto-asset issue is calculated in accordance with the existing regulatory framework applicable to the financial market participant.

Meeting with prospective market participants

Latvijas Banka's specialists offer advice to prospective market participants to facilitate a greater understanding of the regulatory requirements as well as to identify potential challenges in developing new and innovative products or business models. Latvijas Banka's specialists offer:

  • clarifications of certain aspects associated with regulatory requirements;
  • advice on the application of the regulation in the early stage of developing an innovative product or business model.

Apply for a consultation
Please apply in advance to agree on a meeting time by e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone +371 67022300.

Useful information

Crypto-assets