How can public policies and regulatory approaches contribute to the growth of countries’ fintech sectors?
Representatives from regulatory authorities in four European Union (EU) member states addressed this and other similar questions during a session titled ‘From vision to action – building a forward-looking fintech strategy and improving economic competitiveness’ at the Latvia Fintech Forum 2025.
The discussion, held in Riga on 30 September, featured representatives from Malta (the smallest EU member state by population), France (the second biggest by population) and Baltic neighbours Lithuania and Latvia.
The development phases of each nation’s fintech strategies, as well as the implementation of high-profile EU regulation such as the Markets in Crypto-Asset Regulation (MiCAR) and Digital Operational Resilience Act (DORA), were among the topics discussed.
PANEL
* Herman Ciappara – Senior Technical Advisor, Malta Financial Services Authority (MFSA)
* Charles Moussy – Head of Innovation and Digital Finance, Autorité des Marchés Financiers (AMF)
* Lukas Jakubonis – Head, Centre for Financial Market Development at Lietuvos bankas (Lithuania)
* Marine Krasovska – Head, Financial Technology Supervision Department, Latvijas Banka (Latvia)
* Ian Hall – Editor, Global Government Fintech (moderator)
Global Government Fintech presents the best of the panel’s insights:
Herman Ciappara on Malta’s relatively long history in crypto regulation
“Malta, in 2018, was the first EU member state to introduce a fully prudential regime to regulate virtual financial assets (VFA) – we think probably the first in the world, as well. We were bold – it was a risk – but we went ahead. I think it was very, very successful. We learned a lot.
“We set very high standards. By the end of 2024 we had 25 VASPs [virtual asset service providers] licenced under our regime, which might not sound like a great number but we focused on the quality, not on the quantity, and (out of these 25) we had some really good global players.
“I think that’s what really matters – having good players because, ultimately, we know this is a very high-risk sector, so we wanted to start small, start right and do it properly.”
Herman Ciappara on Malta and MiCAR
“With MiCAR, we find ourselves in a very good place because, essentially, the MiCAR and [Malta’s] VFA frameworks are very much the same. In fact, we have one of the few regimes in Europe that are considered an equivalent regime to MiCAR and, therefore, our VASPs can have a simplified approach and authorisation, which is a ‘lighter’ kind of approach.
“I think it has worked for us as a regulator because we understand the business models more. Obviously, it has worked well also for those VASPs with the foresight to actually start early and ‘punish’ themselves with regulation because they set up their practices, set up their controls, their structures, and most of the structures are exactly what MiCAR requires.”
“This is where I think taking bold, innovative steps [to regulation], sometimes into the unknown as well… if you get it right, and if you do it properly, can contribute a lot to the development of a new ecosystem.”
“MiCAR remains a challenge. MiCAR remains our priority. We have around six or seven licences [being assessed] under MiCAR right now – big players – so I think the fun is just beginning because now it gets real, now it gets serious, and there’s a lot to learn.”
Herman Ciappara on Malta’s government and fintech
“We have [Malta government] launched several strategies in the fintech space.
“In 2019, we launched a quite comprehensive strategy, which tried to do everything. We were successful but I think the scope was very wide, with hindsight, and we could not obviously achieve everything in terms of partnership with the public sector.
“In 2021 the Ministry of Finance launched an advisory council to come up with a strategy for all financial services – people from the regulator, people from authorities, people from the private sector, coming together across nine workstreams. Just a few weeks ago, I was asked to chair the fintech working group.
“So now, in 2025, I think we’re ready to refresh the strategy. Because when we look back at what we said in 2021, some things have been done, some things have evolved and some things needs to change.”
Charles Moussy on France’s fintech growth and regulatory approach
“The French fintech ecosystem is quite a big pillar of the French tech economy. We have more than 1,200 fintech companies in France. It has produced so far 14 unicorns. This means a valorisation of more than one billion [euros].
“This year it’s the tenth anniversary of the AMF’s fintech team. In 2015, crypto was a very blurry area for financial authorities such as ours. The idea [has been] to meet these players to better understand what they are doing, and then potentially to propose to, for example, the French Treasury or legislators, or even at European level, such as ESMA [European Securities & Markets Authority], to adapt the regulatory framework.
“Like Malta, France was one of the earliest countries in Europe to create a dedicated framework on crypto. Ours was in 2019 – it was called the PACTE (‘Plan d’Action pour la Croissance et la Transformation des Entreprises’) Law. The idea was to create both a regulatory framework to be compliant with European rules, which were mostly related to AML [anti-money laundering], and also, to add a bit of security for investors.
“We now have a quite vibrant ecosystem in terms of crypto companies with more than 110 crypto companies registered.
“We always saw this French framework as a first step to the European one. We really believe in France, and at the AMF, that the answer to our regulatory framework, and notably in a space like crypto, should be European.”
“As well as MiCAR, there is also the DORA framework for cybersecurity, which is quite a huge step for fintech companies and other financial players.
“As a regulator, we are always striving to ensure this right balance between innovation and safeguarding investors and financial stability. That’s why we created this team back in 2015 because when you are an innovative player, when you ‘play’ outside the current way of practising, then, back in the day, you couldn’t talk to anybody at the financial authority. So, we act like a point of entry. Now, of course, we are not the only people at the authority who know about fintechs, who know about the crypto ecosystem, etc. Many teams of the authority are now fully engaged in the fintech ecosystem.”
Lukas Jakubonis on Lithuania’s regulatory approach
“We have about 280 fintech companies, not including CASPs [crypto asset service providers], in Lithuania. At the beginning of this year, we had around 500 CASPs. But since MiCAR kicked in, we are relicensing them. We have only issued one licence [so far]… but that one licence is to a giant called Robinhood.
“We have had two stages of our fintech strategy over the past ten years.
“The first strategy was [that] we just needed just these first ‘clients’ for Lithuania – we wanted to become a ‘destination for fintech’ in the EU. We managed to attract lots of companies – some of them well-known names, which attracted even more.
“Then we had a period from 2022 to now, which we call the ‘growth’ or ‘maturity’ phase, when we didn’t want to accelerate anymore. We want to let the dust settle and see what’s there, what’s not, who is capable of doing business – and needs to be closed. So, it moves in stages.
“Right now, we’re actually rethinking our strategy, and I’m participating in this very heavily. For me, I try to understand what the problems are that we trying to solve. As a government, you want to [know] why we need to develop fintechs: higher tax receipt for the state; more high-paid jobs that fintechs produce; raising the general prestige of the jurisdiction; also maybe reducing the cost of services – but in the Baltics, I’m not sure we have a very high cost [in the first place], specifically in associated fintech areas such as payments, crypto, crowdfunding and these fields.
“So, the [challenge] for me is: what problems are we solving with fintech development? I’m not sure yet.”
Lukas Jakubonis on missing ‘synergy’ in the Baltic region (Estonia, Latvia and Lithuania)
“I think we are missing the synergy of the Baltic states. Latvia is doing strategy. Lithuania is doing strategy. Estonia is doing strategy. But when you go, for example, to South Korea and say ‘come to Europe’, and they say ‘where?’, you say ‘to Lithuania’, [they ask] ‘which part of China is Lithuania in?’. I’m joking, of course – they know that Lithuania is in Europe somewhere. They cannot point it on the map, though. But they do know the Baltic states – the Baltic states are a bigger unit for them. Expansion to Baltic states, or through Baltic states, makes much more sense than through ‘Lithuania near China’.
“So, my question is: why are we [Baltic states] doing different strategies, even though we are the same region, we have the same cultural similarities? We are seen from outside of Baltic states as one region.”
Marine Krasovska on the above – and Latvia’s approach
“I think it’s a very appropriate question [a pan-Baltic strategy]. That is why and how we need to think: ‘how can we actually align our forces?’. It is not just ‘how can Latvian fintech grow?’ but, actually, ‘how can competition across the Baltics grow and how can we deliver services outside the Baltics?’.
“In Latvia, the first [fintech] strategy [‘Latvia’s government publishes fintech strategy’ – 2023] was just to set the foundation – it was not thinking about growth. This led to our pre-licencing process, fast regulation implementation, Innovation Hub and opening the central bank’s infrastructure for payment providers – there is less competition in the payments market and it could be a way to generate growth.”
“Then when we came to the second strategy, which is currently in parliament for approval [‘Latvia’s government gears up to adopt second national fintech strategy’ – 9 October 2025], where we can think about growth. If we compare fintechs’ growth to the overall financial sector, they’re actually developing quite fast, doing so in a very agile ways. They understand how to how to deliver the product in a better way.”
“Internal collaboration is important. Before we are go to the European stage and think about how to make Europe more competitive, we need to understand how we align with other governmental institutions and with private institutions. There are different priorities, different appetites, different mindsets that should align.
“Then at the European level, there are more considerations: the rise of stablecoins, Chinese expansion to Europe, and so on. Each and every input from each and every country should support our common goal.”
Marine Krasovska on MiCAR implementation in Latvia
“Latvia is ‘MiCAR-ready’. There is huge interest from the market – I would say that half of the applicants [for MiCAR licences] are from Latvia and half from outside. It is important to understand that everything in the crypto space is here to stay, and it is important to see how it will be incorporated with the whole financial ecosystem, and how the financial ecosystem will respond.
“The financial sector is growing and the next step will be even higher with the tokenisation of real assets (that are not financial assets) and, again, the ecosystem will create new types of businesses, new types of the services and new habits.”
Herman Ciappara on to extent to which MiCAR is a big test for consistent financial supervision across the EU
“It’s obviously a big ‘yes’, for many reasons.
“First, it’s a new legislative framework, and when you come to implement it as a regulator, and also on the other side, you need to understand what the paper actually says, what the expectation is – and that is difficult. And then it’s even more difficult to achieve consistency. For sure, the structures are in place. At ESMA [European Securities and Markets Authority – ESMA] level, we meet our colleagues across all member states almost every week now. Obviously these meetings are there to reach agreement, reach harmonisation, understand the issues – but it will take time because we are creating a new sector, it’s a new financial system, in a way. It’s evolving very, very fast.
“This space is not yet mature. MiCAR scope is quite limited – it doesn’t look at DeFi [decentralised finance], it doesn’t look at many other things.
“We’re trying, we’re learning, we’re talking to each other. I think the spirit is good. We will get there. It will be painful. But we will succeed.”
Herman Ciappara on ‘forum shopping’ (the practice of a company choosing a specific jurisdiction or regulatory body to get the most favourable treatment for a crypto-asset business)
“That’s what we try to avoid – forum shopping… who [which firm] goes to which member state, there is a sense of competition.
“I think we should be mature enough to say: ‘As a jurisdiction, I want the best players. I don’t just ‘ramp them in’ and have 100 CASPs, just to say ‘I have 100 CASPs’. [Regulators should be thinking] ‘I want 10 good CASPs and not 100 CASPs’.
“You [as a jurisdiction] obviously try to be attractive, but not by cutting corners but [instead] by being open, through your expertise and by what you bring to the table.”
Charles Moussy on forum shopping, pushing for more power for ESMA and a potential MiCAR 2
“Forum shopping is something we should avoid, but it’s something that already exists in traditional financial system: we’ve seen that for years and years with traditional firms who are picking some regulators over another, some country over another. That’s something I think we have to inherit from the past. But with the crypto sector, we at the AMF really think that we should go further in terms of unified supervision of the crypto market.
“MICAR is the right answer. Before MICAR, you had 27 countries in the EU and 27 different regimes. That was a nightmare, both for crypto firms and for European consumers. But we think, at the AMF, that we have to go create unified supervision at EU level – to give more power to ESMA, to grant licences directly at EU level, and then supervise directly, notably for the large CASPs.
“It could be, of course, acceptable for local players to be supervised by [a national] authority. But when you have a huge crypto platform, for example, notably those from abroad, and then they provide services in every country, or almost every country in Europe, it doesn’t make sense to have a single [national] authority that are supervising [on behalf of] the whole EU.
“If [a potential] MiCAR 2, for example, is put in place, the right answer should be to supervise these large platforms at EU level.”
Marine Krasovska responds to an audience question about a potential tendency for startup companies to prioritise user growth and customer experience over compliance investment. How do the regulators strike the right balance in such situations?
“I think the fintech sector needs to become more mature and we all need to forget the times when there were three people in a garage starting something in the financial sector. Of course, it is fantastic to have innovative ideas, and it is fantastic to come with a new customer experience – but if your business is not safe enough, you will lose it in one day, even in one second.
“If more investment needs to be done, it needs to be in compliance. I’m not talking about AML [anti-money laundering] compliance – the sector generally understands that – but with digital resilience because any kind of fintech (it doesn’t is matter if big or small) is a part of the financial system, and if something happens with a specific company, all the financial system is questioned.
“That’s why I think that investments in the compliance side from the fintech area should be given greater priority, especially from the very beginning. Companies need to focus on how safe their service is in respect of cybersecurity.”
Herman Ciappara answers the same question
“Customer experience is really important but, at the end of the day, our main job is being regulators. This is the financial industry, it’s a highly regulated space, there are risks. We have a job to protect investors. We’re not just looking at how pretty the car is, we really want to understand the engine.”
Charles Moussy responds to an audience question about DORA’s importance
“Cybersecurity is most important thing for every activity. Shifting to DORA is a big step for the whole financial ecosystem, not only the fintech ecosystem. Before it, there were several cybersecurity rules that were separate in some sectors, and now with DORA, they are harmonising all these rules and deepening security even further. The other thing that is also very important in DORA is the way it interacts with third-party providers.”
Herman Ciappara on big challenges and opportunities over the next year
“We’re in a space where so much is happening and the demands on us are amazing in terms of MiCA… we haven’t [during the session] talked about PIs [payment institutions] and EMIs – that’s where a lot of fintech is happening – and keeping up with that. Then there is the [EU] AI Act, which we would need to implement; FIDA [EU’s proposed Financial Data Access Regulation]– that’s also going to be quite a challenge because it’s horizontal (it will affect all sectors) and potentially there’s little appetite to implement that: we need to understand it, sell it and make it work. The [EU] PSR [Payment Services Regulation], PSD3 [Payment Services Directive 3] are also around the corner; [new EU rules on] instant payments are happening right now… and all this falls within the fintech supervision basket. Anything crazy comes to us, which is great, but it’s also challenging.
“Then there are topics such as skillsets, capacity building, resources. We tend to lose people more than we can replace them, because we’re a small ecosystem. The market does poach and we poach back. These are huge challenges.
“We create a lot of associations with the market, because we have to listen to them. Sometimes we think we know best but sometimes the market also knows. And I think this partnership is really important. The challenges are so big for everyone that we need to work together, including across the regulators, because we all have experiences in something, and we can learn a lot from each other, but also other regulators, whether it’s a FIU [Financial Intelligence Unit], or whether it’s the police, everything is involved, because the system is changing, and fraud could change tomorrow, and so we really need to work together.”
Charles Moussy on big challenges and opportunities over the next year
“Beyond crypto, there is also the topic financial markets tokenisation, which is quite huge.
“On that, the AMF has proposed this year several amendments to EU rules to foster the adoption of tokenisation of financial securities. We really see the benefits of tokenisation and we think that we should go further on experimentation. There has been a lot of experimentation over the past years, but we should go further and create real live financial markets on blockchain. We should go beyond the EU pilot regime [on distributed-ledger technology – DLT] and allow players that want to embrace this regime to go further on the experimentation.
“Also, I want to say a word on AI, because AI, of course, is a huge topic for us at the AMF, and I imagine for every regulator.
“The way we see AI is that it could be helpful for us to better supervise the market. The AMF is developing a lot of projects to detect fraud, to detect anomalies on the financial market, for example to automate documentation review and such like. It would not replace humans but it will allow the human to be more effective.
“Also we see a lot of opportunities for the adoption of AI by financial players. But this also could raise questions of responsibility of AI systems or explainability. When you’re a regulator, it is very important to have a clear and explainable system. We’re working on that at the French level, at the European level with ESMA and at international level – IOSCO [International Organization of Securities Commissions] published a report earlier this year on AI in financial markets and we [AMF] participated in its development.”
Lukas Jakubonis on big challenges and opportunities over the next year
“AI.”
Marine Krasovska on big challenges and opportunities over the next year
“First, the increasing economic pressures. There is an impact on the financial sector and we need to evaluate our sectoral risk because it’s not even external any more – it’s just a part of the financial ecosystem and due to that, the question is, how resilient the business models of fintechs or banks or insurance sector or whatever actually are.
“Of course, AI is an important priority for us, too. Currently, Latvijas Banka is investing a lot in our internal AI capabilities. We have launched several AI assistants that are helping us in our supervision on daily basis. Some of the tasks are fully replaced; some of them will be replaced soon. We already see the benefits.
“We also have AI tools that compare all [licensing] applications. We can see which of them have been written by AI, which of them have been written by humans, and which of them have been written by AI but ‘humanised’ after that.”
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