A crypto-asset is a digital representation of value or rights which may be transferred and stored electronically, using the distributed ledger technology or a similar technology. Crypto-assets offer a broad spectrum of applications, ranging from payments and investments to accessing services.

Crypto-assets also encompass utility tokens, which are specifically engineered to grant access to goods or services provided by the issuer of the aforementioned tokens. Crypto-assets also include stablecoins, which are electronic money tokens and asset-referenced tokens aimed at maintaining a stable value.

Crypto-assets operate on the basis of a distributed ledger technology, which ensures security, transparency, and immutability, making all transactions easily traceable and verifiable.

Crypto-assets are created based on the blockchain technology.

A blockchain is a decentralised database, a continuously growing list of ordered blocks (records). Each block contains a time stamp and a cryptographic reference to the previous block. In order to change any of the previously created blocks, all subsequent blocks must also be changed. Therefore, this technology is considered safe.

A distributed ledger technology (DLT) is a technology that uses independent computers, referred to as nodes, to record, share and synchronise transactions with their respective electronic recording units. It differs from the traditional data recording mainly because the data are not centralised but decentralised and connected with cryptographic elements.

Crypto-assets can be used for investment purposes or to conduct public fundraising through offer to the public of crypto-assets.

Offer to the public of crypto-assets is a process in which a legal person offers crypto-assets for purchase to the general public. Such an offer is conducted with the aim of raising funds, promoting the distribution of the crypto-asset, and ensuring its liquidity in the market.

Offer to the public of crypto-assets is fundamentally akin to a public offering of stocks or bonds in the traditional financial markets, but it involves digital assets that are based on the blockchain technology.

A crypto-asset service provider is a legal person whose business operations encompass providing one or more crypto-asset services to customers. They may include crypto-asset exchange services, consulting and asset management, and the maintenance and management of trading platforms or crypto-asset wallets.

On 13 July 2024, the Law on Crypto-asset Services was adopted in Latvia, designating Latvijas Banka as the responsible supervisory authority. The law stipulates licensing and supervision fees for crypto-asset service providers, their duties and rights, etc.

The law stipulates that, starting from 30 December 2024, Latvijas Banka will issue authorisations to crypto-asset service providers and will supervise this market segment.

Companies are encouraged to consult the guides prepared by Latvijas Banka on the procedures for obtaining authorisations to provide crypto-asset services and issue tokens.