There has been a declining trend in the number of Latvians purchasing crypto assets, according to Latvia’s central bank’s “Financial Stability Report” for 2023.
The report is based on payment card usage data and indicates that only 4% of the population bought crypto assets in February 2023, compared to 8% in 2022. This suggests a notable decrease in interest among the country’s residents regarding cryptocurrency investments.
The central bank ascribed the decline in interest in cryptocurrency to various factors. These include the negative sentiment associated with fraudulent activities and bankruptcy among prominent market participants, ill-advised investments that have already been made, the association of cryptocurrencies with money laundering, and the growing connection between crypto-asset companies and regulated financial sector entities.
Latvia Lags Behind In Crypto Adoption
Furthermore, Latvians mainly traded cryptocurrencies using firms in other dynamic European nations recognized for fintech growth. These countries host robust financial technology ecosystems, attracting Latvian cryptocurrency transactions. Latvia’s crypto dealings are often intertwined with flourishing fintech hubs across vibrant European nations.
These countries include Lithuania, Estonia, Malta, and Ireland. According to Chainalysis’ “2022 Geography of Cryptocurrency Report,” Latvia’s position stood at 92 out of 148 nations regarding cryptocurrency adoption, while its neighboring country Lithuania ranked slightly lower at 102.
The report highlights that the nonbank financial sector in Latvia is comparatively less significant than in other European countries.
“This is primarily due to the low level of long-term savings of the population: in Latvia, they have accumulated over a shorter period than many other euro area countries.”
The report discovered that in the country, retail cryptocurrency payments are more popular than cryptocurrency asset investment. Despite being typically small transactions, they continue to dominate. 44% of cryptocurrency retail payments were ≤ 60 euros ($66); 97.5% stayed < 1,000 euros ($1,100). However, the report did not provide specific details on the monetary value of these transactions.
Related Reading | Binance Boosts Shiba Inu & Other Crypto Assets
Comments (No)