Poland’s Tough Crypto Regulation Puts Market at Risk
The Polish political representation is working on a law that will introduce rules for the domestic cryptocurrency market. The Polish cryptocurrency market is the largest in the Central and Eastern European region. Although Polish regulation is based on European Union rules, according to some representatives of the cryptocurrency community, it will be too strict. Even so much so that it could seriously harm the Polish cryptocurrency business.
On the one hand, new clear rules may attract big players to the Polish cryptocurrency market. On the other hand, some local representatives of the cryptocurrency community warn that certain proposals added by Polish politicians may threaten the survival of smaller domestic players. [1]
Poland, as one of the member states of the European Union, has a relatively significant delay in implementing the regulatory framework resulting from the European Union regulation on crypto assets known as MiCA (Markets in Crypto Assets). [2] The Polish government has finally given the green light to a legislative proposal from the Polish Ministry of Finance. But it now appears that Polish politicians have embarked on the path of so-called gold plating, a practice that involves introducing stricter national regulation than that required by European Union law. Some Polish companies operating in the domestic cryptocurrency market are even considering leaving the country.
Strict supervision and heavy fines
Opponents of the current draft of the Polish law on the regulation of crypto assets do not like the fact that supervision of the cryptocurrency market in Poland should be carried out by the Financial Supervision Authority, which is not very popular in the Polish crypto community.
The agency’s job would include overseeing transactions by cryptocurrency platforms, such as exchanges and token issuers. It would then have the right to demand detailed information about their activities.
The Financial Supervision Authority could also impose relatively high fines on cryptocurrency “sinners”. These could amount to more than six million dollars a year—larger than those faced by banking houses active on the Polish market.
Many Poles are also convinced that the national rule, if approved by parliament, would be excessively strict. It would create significant barriers to entry for new players in the Polish cryptocurrency market. This would primarily affect start-ups, for which it would mean considerable initial costs. For example, obtaining a license as a crypto-asset service provider in Poland could cost approximately half a million zlotys. [3]
Presidential veto as the last obstacle
It seems that the proposed law will most likely be approved by both chambers of the Polish parliament—the Sejm and the Senate. The only obstacle to the adoption of rules for the cryptocurrency market would thus be the new President of the Republic of Poland, Karol Nawrocki.
Nawrocki has promised that he will not sign the law in its current form. This would mean that the final adoption of regulation of the Polish cryptocurrency market would at least be delayed.
“I see that more and more people and companies are investing in cryptocurrency assets. How do I see it? In my opinion, innovation must arise in Poland, not regulation,” Nawrocki said during his presidential campaign. In it, he also promised that if he becomes Polish president, he will guarantee that “regulations that limit freedom will never be implemented.” We will probably find out very soon how the scramble to regulate cryptocurrencies in Poland will turn out.
Sources:
[1] https://www.cryptopolitan.com/poland-draft-bill-may-kill-crypto-businesses/
[2] https://eur-lex.europa.eu/CS/legal-content/summary/european-crypto-assets-regulation-mica.html