LBAA x JOIN: Paving the Way for Crypto Innovation in Latvia
JOIN teams up with the Latvian Blockchain Association (LBAA) to strengthen its position in Europe’s Web3 landscape. This partnership gives JOIN access to Latvia’s blockchain network and aligns it with LBAA’s mission to boost blockchain use and collaboration in the EU.
In Latvia, the crypto industry and blockchain technologies have experienced substantial growth, boasting approximately 35 active companies in this dynamic sector. Reinis Znotiņš, the executive director of the Latvian Blockchain Association, anticipates rapid development in the coming years, drawing parallels with the crypto boom in neighboring Lithuania.
A pivotal moment for the industry is the imminent implementation of the Markets in Crypto-Assets Regulation (MiCA) in national legislation. Latvia is set to lead in the adoption of this regulatory framework within the European Union, proposing innovative approaches such as allowing the payment of company share capital and taxes with cryptocurrency assets.
By strategically embracing these initiatives, Latvia aims to position itself as an attractive hub for Web3 companies in Europe.
The Latvian Crypto Landscape
Size and Diversity
Latvian Fintech Landscape 2023 (Source: Venture Faculty)
Over the past seven years, Latvia has witnessed the emergence of several noteworthy companies in the blockchain and Web3 sectors across diverse verticals. Approximately 10 companies have established sustainable business models, actively participating in global cryptocurrency payments and institutions.
For instance, the Gravity Team’s algorithms handle 0.8% of the global cryptocurrency market turnover daily, totaling several hundred million dollars. Noteworthy players like Nexpay, Hodl Hodl, Colizeum, Beetroot Lab, Blockvis, and others contribute to the industry’s vibrancy.
Sectorial Specialization
The Latvian crypto landscape encompasses a spectrum of activities, from Web3 game development to blockchain software and NFT-related ventures. Notably, airBaltic, Latvia’s national airline, has embraced NFTs as a customer engagement tool, showcasing the industry’s innovative applications.
Smart contract companies like Salto X, a joint venture between Latvian and Estonian entrepreneurs, add to the diverse tapestry of blockchain ventures. Specialized niches, such as the eSIM company Yesim with integration into the Binance platform, exemplify Latvia’s role in specific segments of the crypto market.
The Numerical Landscape
As of now, around 35 companies are actively contributing to Latvia’s crypto industry. The Latvian Blockchain Association seeks to engage with all entities connected to Latvia, whether through founding or physical location, including those legally based outside Latvia but founded by Latvians.
The numerical strength is indicative of the industry’s economic significance. Handling substantial sums, such as the cumulative $100 billion processed by Gravity Team, showcases the sector’s importance and rapid growth potential.
Evolution of the Industry in Latvia
Initial Players
Bitfury, founded by Vals Vavilovs, stands out as one of the earliest major crypto companies associated with Latvia. Initially focusing on various devices, Bitfury evolved to provide security solutions and infrastructure for blockchain companies. With a substantial investment of $170 million, Bitfury has grown into a billion-dollar entity.
The Impact of MiCA Regulation
The European Parliament’s adoption of the MiCA Regulation is poised to reshape the crypto landscape, providing a legal framework for development. We anticipate positive changes as the regulation allows crypto exchanges, brokers, and service providers to register and obtain licenses in any European country. Latvia, by being an early adopter of this regulation, can establish itself as a crypto center on the European stage.
Latvia’s Strategic Initiatives
The Latvian Blockchain Association is actively pursuing initiatives to enhance Latvia’s appeal to crypto companies. Efforts include exploring the feasibility of paying taxes and company share capital with cryptocurrencies, streamlining remote company registration, and facilitating communication with public authorities.
Overcoming Challenges
Acknowledging the need for a shift in mindset, strong efforts in regulation are reducing potential risks associated with money laundering. Collaboration with Latvijas Banka, the introduction of a sandbox for blockchain companies, and continuous awareness-building across institutions are crucial steps in fostering a conducive environment for crypto innovation.
The Role of the Latvian Blockchain Association
Latvian Blockchain Association (LBAA)
The Latvian Blockchain Association operates with two core objectives: building community and educating the public. Rigorous evaluation of member eligibility ensures a commitment to long-term business practices without engaging in fraudulent activities. The association actively engages with public institutions and policymakers to highlight the potential of the blockchain industry and actively promotes Latvia as an attractive destination for crypto companies.
What does this partnership bring to JOIN?
Reinis Znotiņš (LBAA president) & Edgars Kuks (JOIN representative in Eastern Europe)
The partnership between JOIN and the Latvian Blockchain Association (LBA) provides a host of strategic advantages for JOIN:
Access to Latvian Crypto Ecosystem
JOIN benefits from direct access to Latvia’s flourishing crypto industry, creating a conducive environment for collaboration and a wealth of potential business opportunities.
Regulatory Insights
By aligning with LBA, JOIN gains access to valuable regulatory insights. LBA’s active involvement in regulatory advocacy ensures that JOIN stays well-informed about evolving standards in Latvia, enhancing the company’s ability to navigate compliance requirements effectively.
Community Building
JOIN’s participation in LBA’s community-building and education initiatives contributes not only to the growth of the overall crypto ecosystem but also enhances JOIN’s visibility and reputation. This involvement fosters a positive image and strengthens connections within the community.
EU Connections
The partnership strengthens JOIN’s connections within the European Union. Leveraging LBA’s network, JOIN can actively engage in advocacy efforts at the EU level, facilitating smoother expansion into new markets and reinforcing its presence on a broader scale.
Positioning in European Hub
JOIN strategically aligns itself with Latvia’s ambitious goal to become a Web3 hub. This alignment not only positions JOIN as an active participant in the European crypto landscape but also makes it an attractive prospect for potential investors and collaborators seeking opportunities within the growing crypto ecosystem.