Central Bank of Latvia sets out critical financial services framework and resilience measures including offline card payments and the potential digital euro

The Central Bank of Latvia published an explainer on “critical financial services” and payment resilience, outlining how access to money and the ability to make payments would be maintained during emergencies and crises, and describing the digital euro as a potential future option to strengthen resilience. In 2023, the central bank reviewed the list of critical financial services expected from the largest-market-share commercial banks (AS Swedbank, AS SEB banka, AS Citadele banka, and the Latvian branch of Luminor Bank AS). With cash accounting for 26% of daily payments in Latvia, it also highlighted efforts to strengthen cash access infrastructure through “critical” ATMs designed for continuous power and communications and prioritised cash replenishment during crises. As an additional back-up, the central bank pointed to the rollout of offline card payments, enabling purchases at specific merchants during temporary payment-card infrastructure disruptions, but only when the physical card is inserted into a terminal and a PIN is entered. Work to broaden offline card payment availability is continuing with retail and pharmacy networks, with steps already taken in petrol stations. On the digital euro, the central bank noted that the European Central Bank has defined “resilience-by-design” and that, if a decision to introduce the digital euro is made, it is expected to support offline storage on a smart device and instant offline payments via Near Field Communication, with funds held in Eurosystem infrastructure so users would not be tied to a single bank or payment service provider.