Story Highlights Latvia Aligns with EU Crypto Standards: Bill No. 24-TA-3148 enforces DAC8 and CARF rules, tightening crypto reporting from 2026. Latvia Eyes Blockchain Leadership: With 20+ new startups and clear regulations, Latvia aims to become a top Web 3.0 innovation hub. On June 3, the Latvian Cabinet approved Bill No. 24-TA-3148, a major step toward aligning the country’s tax laws with the Crypto Asset Reporting Framework (CARF) and the EU’s DAC8 directive. The new legislation introduces stricter reporting and due diligence rules for crypto asset service providers and will come into effect on January 1, 2026. Key Highlights of Latvia’s New Crypto Regulation DAC8 Directive Implementation: The bill incorporates Directive 2023/2226/EU (DAC8), which mandates detailed reporting standards for crypto service providers to prevent tax evasion and crypto-related financial fraud. Automatic Data Exchange: Aligned with the Multilateral Competent Authority Agreement (MCAA), the new framework enables cross-border financial data sharing for better transparency under CARF. Stricter Reporting Obligations: The Common Reporting Standard (CRS) and CARF now extend to crypto, requiring service providers to report on crypto assets, swaps, and electronic money products, including central bank digital currencies (CBDCs). Non-Compliance Penalties: Failure to meet the reporting requirements can result in fines of up to EUR 14,000 (~$16,026). New Definitions Introduced: The bill formally defines reportable crypto assets and crypto swaps, plugging critical gaps in earlier regulations that allowed for loopholes in taxation. EU-Wide Adoption Deadline: All EU Member States must publish their DAC8-compliant rules by December 31, 2025. Transparency and Innovation at the Core The new crypto bill aims to increase transparency and cooperation across the EU by ensuring all crypto transactions, including indirect investments, fall under international reporting standards. CARF also expands CRS coverage to include digital wallets and stablecoins, aligning with the OECD’s global push for crypto regulation. Latvia’s Vision: A Blockchain Powerhouse Latvia is rapidly emerging as a hub for crypto and blockchain innovation. According to the Ministry of Economics: Around 20 new blockchain startups are setting up operations in the country. Established names like Paybis reflect the growing confidence in Latvia’s crypto-friendly ecosystem. With a clear regulatory roadmap, Latvia is positioning itself to lead in Web 3.0 development, attracting global talent and investment in blockchain technology.