Latvia: cryptocurrencies are unable to fulfill money functions effectively
There is no plan to increase use of private cryptocurrencies and bitcoin in particular in economy of Latvia. That’s the answer Central Bank of Latvia gave to CopPay’s inquiry on the matter of using cryptocurrencies as the mean of payment in different countries.
“We still consider cryptocurrencies unable to fulfill money functions effectively and to be high risk contractual mean of payment. Latvijas Banka invites both financial institutions and natural persons to avoid engagement in activities with them”, — is stated in the answer signed by Deniss Filipovs, Head of Payment Systems Policy division (Payment Systems Department, Latvijas Banka).
In 2014 both Latvijas Banka and Financial and capital markets commission — Payments and financial market supervisory authority –had published their opinions on Bitcoin. The only slight change in the position was recently made after the Court of Justice of the European Union decided that the exchange of traditional currencies to bitcoin is exempt from VAT.
“The decision also explains that bitcoin should be rather considered as a contractual (agreed) mean of payment than a commodity as we considered it before”, — Latvian Central Bank said.
Currently cryptocurrencies do not explicitly fall within the scope of any legal act in Latvia. Nevertheless, the activity of cryptocurrency trading is Personal revenue tax or Enterprise income tax applicable activity. It shall be also considered that soon specific regime for cryptocurrency exchanges will be implemented according to the Anti-Money Laundering Directive 5 as Directive stays in force.
“Cryptocurrency is recognized as a contractual mean of payment if both parties accept it and are ready to take all the risks arising from the use of cryptocurrency”, — Central Bank of Latvia stated.
Now CopPay carries out a research to determine the most favorable countries for placing its payment platform. Also, CopPay plans to summarize and conclude the results of the study.
CopPay is a decentralized multi-cryptocurrency payment system. Its mission is to create a world in which all payment needs can be met with the help of cryptocurrency. Its goal is to cryptofy the business. CopPay team developed a payment platform, which is already available for alpha testing and works legally in Europe.
