In a speech in London, a Central Bank of Latvia deputy governor set out the bank’s view that central banks and supervisors must adapt to a financial system being reshaped by digitalization, cyber risk, geopolitical fragmentation and new forms of infrastructure dependence. The core message was that Europe should pursue trusted innovation rather than deregulation, combining legal clarity, consumer protection and market integrity with support for new financial technologies. The speech framed cyber resilience, payment systems, cloud concentration and data sovereignty as issues that now sit at the intersection of financial stability, supervision and monetary policy. The remarks highlighted several priorities. Payment systems and financial market infrastructures were described as strategic infrastructure, with resilience and sovereignty now as important as efficiency, and with cross-border instant payment links requiring shared standards and governance. Supervisors were urged to strengthen oversight of cloud-based and cross-border data environments, while artificial intelligence was presented as requiring governance around explainability, validation and auditability. The speech also pointed to tokenization and the future role of central bank money, including wholesale central bank digital currencies, as strategic policy questions rather than theoretical debates. MiCA was cited as an example of how Europe can provide legal certainty for innovation, and Latvia was presented as pursuing that model through investment in fintech expertise, digital supervision, crypto supervision readiness and dialogue with innovators. The speech also linked these themes to reserve management and broader central bank strategy. It argued that geopolitical fragmentation, sanctions, infrastructure dependencies and cyber risks are changing how central banks think about reserve diversification, liquidity access and the definition of safe assets, with infrastructure resilience becoming an additional consideration alongside liquidity, creditworthiness and legal certainty.
Central Bank of Latvia2026-06-12
Central Bank of Latvia outlines trusted innovation approach to digital finance resilience and tokenization
In a London speech, a Central Bank of Latvia deputy governor said central banks and supervisors must treat digitalization, cyber risk, payment infrastructure and cloud dependencies as core financial stability issues. The remarks argued for a European model of trusted innovation, citing MiCA and highlighting AI governance, tokenization and wholesale central bank digital currencies as key policy areas. The speech also said geopolitical fragmentation and operational resilience are reshaping reserve management and the broader role of central banks.