Polish crypto firms are being forced to seek licenses abroad or risk shutting down after President Karol Nawrocki refused to sign legislation giving the country’s financial regulator authority to issue licenses under the European Union’s Markets in Crypto-Assets regulation.
MiCA, the EU’s sweeping crypto rulebook, comes fully into force on Wednesday, ending a transition period that allowed companies to operate under older national regimes. Poland remains the only EU state without a fully functional domestic application and licensing system, even though the country has about 2,000 registered virtual asset service providers.
Only a small number of Polish firms have secured MiCA licenses in other EU countries, raising the prospect that many smaller companies will either close, relocate or seek authorization abroad.
"Due to the fact that the Polish legislation implementing the MiCA regulation has not yet entered into force, no Polish public authority has been designated as the competent authority for the supervision of activities covered by the MiCA Regulation, with the exception of issuers of electronic money tokens (EMTs)," Jacek Barszczewski, a spokesman for Poland's Financial Supervision Authority (KNF), said in an email. EMTs in Poland fall under a different regulatory framework.
A MiCA license issued in any EU country gives the holder access to the entire 27-nation bloc as well as Iceland, Liechtenstein, and Norway. That means Polish companies are likely to apply in countries such as Lithuania, Latvia or Germany before passporting their services back home.
"The business simply moves somewhere else," Wojciech Kaszycki, chief strategy officer of Warsaw-based fintech BTCS, told CoinDesk in a video interview. "None of the Polish companies can receive the authorization in Poland."
Nawrocki says the law, which he rejected for a third time earlier this month, gives regulators excessive powers, including the ability to block crypto companies' websites and impose rules that could push businesses abroad. He's also said it favors banks and large corporations over startups while creating an overly complex regulatory framework.
Kaszycki said he agreed with Nawrocki's criticism that parts of the law went beyond MiCA itself. The draft, which has been passed by both houses of parliament, allows the Financial Supervision Authority (KNF) to freeze customer funds for months and block websites before companies have exhausted legal appeals.
Mateusz Kara, CEO of Morphic Financial Group, headquartered in London and with deep roots and operations in Poland, said the cost of a MiCA license and the political deadlock could “wipe out Polish crypto.”
“It will change the business landscape of crypto entities a lot,” Kara told CoinDesk. “For example, in Poland, we have around 2,000 VASP entities. As far as I know, we are the only ones that have a MiCA license right now. So, I think you can imagine how many entities will need to shut down the business starting from the second half of this year.”
Despite the political deadlock, BTCS' Kaszycki said he supports MiCA because Europe needs a common crypto rulebook.
"It is a good beginning," he said. "But it needs to be improved."
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