Advancing Asset Tokenization in the European Union and Latvia : A Regulatory and Policy Perspective

Abstract

Our study examines the regulatory challenges and opportunities of asset tokenization within the context of the European Union (EU), emphasizing the balance between technological innovation and investor protection in the digital economy. Focusing on 2023 EU Markets in Crypto-Assets Regulation and its application in Latvia, we utilize comparative legal and integrative literature review methodologies to explore how regulatory frameworks can enhance investor accessibility, liquidity, and transparency in digital transactions. Our findings emphasize the importance of strong legal frameworks in promoting economic growth and protecting investors, thereby contributing to a more inclusive financial ecosystem. By examining the regulatory landscape for distributed ledger technology, we provide insights into how regulations can balance innovation in asset management with the imperative of investor protection. We offer a broad analysis of the intersection between legal frameworks and technological advancements in Latvia, illustrating how diverse regulatory approaches can support both economic development and investor interests. Our research originality lies in its focus on the EU’s regulatory diversity, particularly in Latvia, and its implications for broader European and international regulatory environments. Our study contributes to ongoing discussions on optimizing regulatory strategies to facilitate secure and advantageous financial technologies, reflecting the diversity of legal and economic approaches across Europe.Peer reviewe