As the Baltics adapt to the MiCA regulatory framework, the region’s crypto payments market is entering a new phase of development. In an interview with CP Media, Misha Kaplin, Head of Business Development at CryptoProcessing by Coinspaid, discussed why businesses are becoming more comfortable with cryptocurrencies and how stablecoins, banks, and payment infrastructure are shaping that transition.
The discussion also touched on Latvia’s growing appeal as one of the most promising destinations for crypto and fintech businesses in the region.
How the Baltic Crypto Market Is Evolving
What are the key factors driving the attractiveness of the Baltic region for crypto businesses today?
The main factor is the transition from the previous regulatory framework to MiCA. Companies have either already completed that process or are currently working toward obtaining a license.
Historically, the Baltics were among the first regions where the crypto industry became regulated. Estonia was the initial pioneer, followed later by Lithuania.
Licensing outcomes appear to vary across Baltic jurisdictions, with some markets progressing faster than others. Against that backdrop, Latvia appears highly open to financial business models, including those involving cryptocurrencies. Unlike its neighbors, Latvia entered the MiCA era without the same long-standing VASP licensing history as some neighboring markets, but the country chose to enter the market proactively through the new framework.
Based on feedback from market participants, Latvia’s regulatory environment is often described as open and constructive.
Another practical consideration is cost. In smaller Baltic jurisdictions, legal and licensing expenses can be noticeably lower than in markets such as Luxembourg.
Why hasn’t the number of previously issued VASP licenses automatically translated into a comparable number of MiCA licenses?
Several factors are driving this trend:
- Regulatory consolidation. The market may be consolidating as regulatory requirements evolve. Even strong businesses must meet regulatory expectations. Otherwise, they won’t receive a MiCA license.
- Jurisdictional choice. Some companies choose to pursue licensing in other jurisdictions, and some may restructure outside the EU depending on their target markets.
- Relocation outside the EU. Some businesses are leaving the EU altogether if they don’t need to serve European clients. In some cases, MiCA is leading companies to restructure their operations or focus on other jurisdictions.
Market consolidation is also underway, with smaller players being acquired by larger ones.
Where does the Baltic region have an advantage or disadvantage compared with other European jurisdictions from a regulatory perspective?
I wouldn’t say obtaining a license in the Baltics is easier. A more accurate assessment is that it can be less expensive, and regulators already have experience working with VASPs and crypto business models.
That matters because when regulators already understand how crypto businesses operate, companies don’t have to spend time explaining fundamental concepts from scratch.
At the same time, it’s difficult for me to compare the Baltics directly with other European jurisdictions because I haven’t worked with regulators outside the region. I can only speak from my own experience in the Baltic market.
Crypto Payments Move Beyond Skepticism and Into Business Use
How has the business community’s attitude toward crypto payments in the Baltics changed over the past 2 to 3 years?
The attitude has become noticeably more pragmatic and receptive. A few years ago, if you approached a major local e-commerce company and pitched Bitcoin payments, people might have looked at you as if you were wearing a tin foil hat. Today, the conversation is very different. Businesses are listening, and they increasingly see the value proposition.
We’re seeing a similar shift among banks. A concrete example is LHV in Estonia, which recently received a MiCA license. To my knowledge, it’s the first bank in Estonia to have done so, and that’s a significant step for the region’s fintech sector. When a traditionally conservative financial institution obtains this kind of license, it signals that the market no longer views crypto exclusively as a high-risk asset class. Financial institutions are learning how to manage these risks, work with new tools, and integrate Chainalysis and compliance processes into their operations.
For crypto service providers, that’s a positive development. Conversations with businesses have become significantly easier.
How is this shift being influenced by the move from Bitcoin payments to stablecoin payments?
The impact is substantial. Stablecoins can be easier for businesses and banks to understand because the new regulatory framework treats them more like electronic money. For payment companies operating under PI or EMI licences, MiCA is creating a clearer framework for exploring stablecoin use cases, depending on the token type and activity.
At the same time, people are gradually recognizing that crypto includes more than just highly speculative assets. It also includes stablecoins, which don’t carry the same level of price volatility. The risks haven’t disappeared, but businesses don’t have to deal with significant day-to-day price fluctuations.
That’s why stablecoins represent one of the most important drivers of growth in the crypto payments sector.
Can crypto’s investment narrative hinder the growth of payments?
I don’t think it only acts as a barrier.
For many people, crypto begins as an investment story. They look for returns, accept risk, learn how to store digital assets, and make transactions. Over time, they realize those assets can also be used for payments.
In that sense, investment and payments are closely connected. The more people learn to use blockchain technology through investing, the easier it becomes for them to transition to real-world payment use cases.
What barriers are still holding back broader crypto payment adoption in the region?
One of the main barriers remains the readiness of financial institutions to integrate new payment tools. Many institutions are still in the process of building the expertise and operational frameworks needed to work with this sector.
Another important obstacle is the perception of cryptocurrency primarily as an investment asset. In many countries, people enter the crypto market through investing rather than through payments.
Attitudes toward crypto ownership also vary across the Baltics. According to research by K33, Estonia appears to have the lowest crypto ownership rate in the region, at roughly 6.7% of the population, while Latvia and Lithuania are closer to 12%. Respondents in Latvia and Lithuania also appear more open to buying cryptocurrency over the next 10 years. That difference isn’t necessarily tied directly to income levels, but there does appear to be an underlying pattern.
Industries Where Crypto Payments Are Already Taking Hold
Which industries in the region are leading the adoption of crypto payments?
Crypto payments tend to work best in sectors with higher average transaction values. Consumers are generally less likely to use crypto for a €5 purchase, but they’re much more willing to use it for larger transactions. That’s why the strongest potential lies in e-commerce, travel, hospitality, airline tickets, and other categories where the average purchase may range from €200 to €500.
One encouraging sign for the region is that airBaltic already accepts cryptocurrency as a payment option on its website. It would also be encouraging to see greater adoption in real estate, although that will likely take more time as banks and CASPs continue improving their ability to manage AML risks.
Are there any notable examples of companies that have implemented crypto payments and seen measurable results?
Yes. One example is Arvutitark, an Estonian electronics and IT retailer that integrated crypto payments through CryptoProcessing. Following the integration, the company achieved a 35% crypto payment completion rate and recorded 2% to 3% month-over-month revenue growth.
More broadly, publicly available case studies suggest that the average crypto transaction can be 2 to 3 times larger than transactions made through channels such as open banking. The lifetime value of crypto customers can also be 2 to 3 times higher than in traditional finance channels. Customer acquisition can be more efficient as well, since relatively few e-commerce businesses currently accept cryptocurrency, and merchants that do can stand out among consumers who already hold digital assets.
Does the approach to implementing crypto payments differ across industries?
Yes, significantly.
Financial institutions typically focus on infrastructure solutions for their B2B and B2C customers. They require both technological and compliance infrastructure, particularly when those capabilities aren’t built in-house.
Merchants, however, have different requirements. Offline businesses may rely on POS terminals, online retailers typically use e-commerce integrations, and high-value transactions are often processed through invoicing.
For example, when a customer purchases an expensive item, the payment may not go through a standard checkout flow. Instead, an invoice is generated and sent directly to the customer.
Which solutions and products are likely to see the strongest demand among companies in the region?
Demand is likely to be concentrated in three key areas:
- E-commerce integrations, as online merchants want to add a crypto payment option without rebuilding their existing payments infrastructure.
- POS terminals for offline businesses with higher average transaction values.
- Invoice-based payments for high-value goods and services.
Another area of growing interest is stablecoin payments and stablecoin-based settlement. For PSPs and merchants, these solutions can be particularly valuable when paying suppliers outside the EU and seeking alternatives to traditional SWIFT transfers.
How Banks and Payment Providers Are Building Trust in Crypto
What role do crypto payment processors play in the development of the crypto payments market?
Crypto payment processors have a direct impact on the growth of the market. Their role extends beyond the technology required to accept payments. They also help build trust, educate users, and promote alternative payment methods.
At CryptoProcessing by Coinspaid, we participate in selected industry events and collaborate with existing merchants on informational initiatives related to crypto payment infrastructure. These activities focus on sharing operational context and market observations rather than promoting adoption.
The more businesses and consumers are exposed to these use cases, the more comfortable they become with crypto as a payment method.
How can trust in the industry grow through banks and traditional financial institutions?
Trust in crypto often develops through trust in institutions that consumers already know and rely on.
Early adopters are usually willing to experiment with new products, but more conservative users often wait for validation from organizations they already trust. If someone holds their savings in a bank account and has confidence in that institution, the introduction of crypto services through the same bank can significantly influence perception.
When a reputable bank tells its customers that they now have access to licensed crypto services, whether for purchasing, holding, or using digital assets, it changes how more conservative users view the market.
That’s why MiCA licenses issued to banks could become a foundational step not only for crypto adoption but for the broader fintech ecosystem across the region.
The Baltics as a Crypto Hub Again: The Case for Latvia
Where do you see the biggest growth opportunities for crypto payments in the Baltics over the next few years?
I see several areas of growth.
Banks will increasingly offer crypto services to their customers, similar to what many neobanks already provide today. Merchants will continue adding cryptocurrency as a payment option. PSPs, open banking providers, and buy now, pay later companies will, at the very least, start accepting stablecoins as a payment option because they already have the necessary licenses and payment infrastructure in place.
We’ll also see more use cases where merchants accept payments in euros while settling in EURC or USDC if that better suits their supplier payment needs.
Western markets are already pointing in that direction. Mastercard’s integration of SoFiUSD into its global settlement infrastructure and Stripe’s launch of Open Issuance through Bridge both show how stablecoins are moving deeper into payment, settlement, and issuance infrastructure. I expect traditional PSPs to follow a similar path by accepting crypto payments, or at least stablecoin payments, and Europe is likely to move in the same direction.
Could the Baltic states become a European crypto hub again within the next 3 to 5 years?
If that happens, I would primarily associate that opportunity with Latvia.
If the region regains its status as a crypto hub, Latvia currently appears to be the most likely source of that momentum. Achieving that requires more than regulation alone. It also requires a business-oriented approach, including open dialogue with market participants, an understanding of business models, and a willingness to attract tax revenue, talent, expertise, and high-value jobs.
Market development depends on a clear regulatory framework, practical implementation, and ongoing dialogue between regulators and market participants. Countries that want to become hubs must maintain a balance between risk management and business development.
Why does Latvia currently look like the region’s most promising growth engine?
Latvia appears to be the most open to market participants.
Based on my experience interacting with regulators and public sector institutions, there is a genuine culture of dialogue, and that matters.
At the same time, Latvia’s potential extends beyond crypto. The country also has strong prospects in traditional fintech, supported by PI, EMI, and MiCA licensing frameworks.
The crypto sector still has substantial room for growth, and if the current licensing pipeline materializes as expected, Latvia could emerge as the region’s primary growth driver.
What could change the trajectory of Estonia and Lithuania?
Political and regulatory signals continue to shape market development. Governments and finance ministries influence the direction of regulation, and market progress depends on a clear framework and the ability of financial institutions and businesses to operate within it. Over time, jurisdictions that maintain that balance are more likely to keep attracting activity and investment.
