Why the Baltics Are Building Europe's Crypto Infrastructure Despite Germany's MiCA Lead

In the latest MiCA register snapshot from September, Germany holds 89 authorised crypto-asset service providers, comfortably ahead of France with 35 and the Netherlands with 29. The Baltic states lag far behind: Lithuania has 13, Latvia 10, and Estonia three.

But licence totals reveal little about the infrastructure firms are actually building. A traditional bank adding crypto custody and a crypto platform connecting digital assets to payment rails both appear as single entries in the same register. Konstantins Vasilenko, co-founder and CBDO at Paybis, argues the table measures permissions, not operating capacity.

The regulation has weakened the link between a company's home jurisdiction and the market it can serve. Once authorised in one member state, a crypto-asset service provider can use the EU's cross-border notification framework to operate elsewhere. The largest domestic financial market no longer automatically provides the best base for a pan-European crypto business.

The Baltic experience underscores why headline numbers can mislead. Estonia had 1,234 licensed virtual-asset firms at the end of 2019. After stricter rules took effect, that number collapsed to just 53 by December 2023.

Lithuania offers a different story. Its 248 fintech companies serve nearly 40 million customers across Europe and employ more than 7,800 people. Payment and electronic-money institutions in the country processed €166 billion in 2025. Crypto firms entering that market build alongside an established payments industry with experienced teams and systems already moving regulated money at scale.

Four of Latvia's first 10 MiCA-authorised CASPs also hold payment-institution permissions: Paybis, Nexdesk, Nodu Digital, and Trek Technologies. Those paired licences cover different parts of the same transaction — customers need to move euros in and out, businesses need settlement, and platforms need access to payment systems as well as permission to handle digital assets.

Three firms received both licences simultaneously within a two-month window:

• Paybis obtained MiCA and payment authorisations in May 2026
• Trek Technologies followed with both in May 2026
• Nodu Digital secured dual licences in July 2026

Nexdesk added a payment-institution licence in May 2026 to the MiCA authorisation it had received the previous December.

Latvia's central bank, Latvijas Banka, charges €2,500 to review a CASP authorisation application, one of the lowest fees in the EU. It also offers applicants unlimited free consultations, including before the company is legally established.

The pre-licensing process lets firms test business plans and documentation with supervisors before filing formally. Eligible non-bank payment and electronic-money institutions can access Latvijas Banka's EKS payment system directly for euro payments across SEPA.

The advantage here is earlier regulatory feedback. Firms discover what regulators expect and what they will need to change before making a formal filing.

Transaction volume is the obvious counterargument. If the Baltics are becoming an infrastructure centre, why hasn't usage already shifted decisively away from larger markets?

A firm first needs regulatory permission, payment access, banking connections, products, and distribution. Transaction volume only starts to reflect the result once those pieces are in place. There is not yet enough post-MiCA operating history to claim that Latvia or the wider Baltics have overtaken Germany on crypto volume.

Yet the build-out needed to compete for that volume is already visible. Germany's large banks and financial institutions entering crypto show that digital assets are moving deeper into mainstream finance. In the Baltics, firms are combining crypto authorisation with the payment infrastructure needed to connect digital assets to the rest of the financial system.

Germany will remain a far larger financial market than Latvia, Lithuania, or Estonia. But MiCA makes domestic market size less decisive when a company can establish itself in one jurisdiction and serve customers across the EU.

If that base also provides access to the payment system, a small market can carry much more weight than its size suggests. The licence table points to Germany — but Europe's crypto rails are increasingly being built in the Baltics.