On November 6, the finance ministers of Estonia, Latvia, and Lithuania signed a Memorandum of Understanding in which they agreed to cooperatively explore a number of strategies aimed at boosting Baltic capital market development, including potentially supporting the development of distributed ledger technology (DLT) solutions.
Signed with the objective of harmonizing regulations to effectively create a single “regional capital market in the Baltic states” by “facilitating cross border investments and by breaking down investment barriers,” the MoU calls for the creation of a steering committee that would meet at least once per year to guide and track the document’s implementation.
In addition to encouraging collaboration on DLT development, the memorandum calls for the promotion of the “Pan-Baltic Asset Class,” which Latvian Finance Minister Dana Reizniece-Ozola describes as “covered bonds” meant to attract international investment.
Estonia previously made waves in the world of blockchain technology, a subset of DLT, when it implemented a blockchain-based e-Residency program, which offers “transnational digital identity issued by the Estonian government to virtually anyone in the world.” Kaspar Korjus, the managing director of the program, even proposed an Estonian state-issued cryptocurrency. European Central Bank president Mario Draghi reportedly responded to the suggestion by saying that “No member state can introduce its own currency.”