Between rule-taking and rule-shaping: how the EU regulation shapes and constrains the Baltic fintech boom

Over the last decade the Baltic states have become the EU’s standout case of crypto and broader fintech development on the EU periphery. Capitalizing on Brexit, the Baltic governments have developed finance-tech ecosystems as a core development strategy, although with significant cross-country variation. Existing scholarship on these developments falls into two categories. One focuses on cross-national variation in fintech adoption through a public-policy lens, emphasizing policy entrepreneurs, administrative capacity, and policy learning (Raudla et al., 2025). The other situates these trajectories within growth/development models, arguing that small, peripheral “rule-taking” states can carve out specialist niches by recalibrating finance-based policy legacies and creatively leveraging Eurozone constraints (Eihmanis and Kuokštis, forthcoming). Yet, both perspectives overlook the role of the EU’s changing regulation. This paper addresses this gap by tracing the evolution of EU fintech and AML initiatives and examining how it interacts with national law and enforcement. Empirically, the paper combines interviews with EU and national policymakers with sequence analysis of EU initiatives in the context of national regulatory tightening in response to the financial and money-laundering crises post-GFC, on the one hand, and promotion of fintech as a national development strategy, on the other.