Polish President Karol Nawrocki has once again vetoed the government’s proposed “Crypto Asset Markets Act,” effectively halting its progression into law. The bill, intended to align Poland with the European Union’s (EU) Markets in Crypto-Assets (MiCA) regulation, has drawn criticism for imposing stricter rules on domestic cryptocurrency companies than those stipulated by the EU framework. This marks the second time President Nawrocki has rejected the legislation, the first veto occurring in December of last year.
The core of the dispute lies in the extensive powers the bill would grant to the Polish Financial Supervisory Authority (KNF). Critics argue that the KNF would have the authority to excessively regulate the crypto market, potentially stifling innovation and driving businesses elsewhere. Specifically, the bill allows the KNF to suspend or ban the public offering and trading of crypto assets, and to impose significant sanctions on intermediaries who fail to comply with the regulations. Failure to report token issuances or service offerings to the KNF could result in criminal liability, with fines reaching up to 10 million złoty – approximately $2.8 million USD.
The EU’s MiCA regulation, adopted in 2023, aims to create a harmonized legal framework for crypto-assets across all member states. It covers crypto-asset issuers and crypto-asset service providers (CASPs), establishing rules around transparency, authorization, and consumer protection. Poland’s attempt to implement MiCA through this particular legislation, however, has been viewed as going beyond the scope of the EU regulation, adding layers of control that have raised concerns about civil liberties and market vitality.
President Nawrocki has consistently voiced concerns about overregulation, arguing that it could push crypto companies to relocate to more favorable jurisdictions. As stated in a December update on his website, the president believes that “overregulation is a surefire way to push companies abroad instead of creating the conditions for them to earn and pay taxes in Poland.” This sentiment echoes arguments made by industry advocates who fear that overly restrictive rules could hinder the growth of the crypto sector within the country.
The current impasse highlights a broader political tension within Poland. The bill was resubmitted by the government of Prime Minister Donald Tusk on December 9th, and again on December 10th, without any changes following the initial veto. This move was interpreted as a strong signal of the government’s determination to enact stricter crypto regulations, citing national security concerns as justification for the urgency. However, President Nawrocki, representing a more nationalist viewpoint, remains steadfast in his opposition, prioritizing civil liberties and a vibrant market environment.
This struggle positions Poland as one of the few EU countries that has yet to fully implement domestic legislation supporting the MiCA regulation. The delay creates uncertainty for crypto businesses operating within Poland and potentially hinders the country’s ability to capitalize on the growing crypto market. The KNF would be designated as the primary regulatory body for the crypto asset market under the proposed law, requiring all CASPs – including exchanges, wallet providers, and token issuers – to register and obtain a license to operate legally.
The situation in Poland is occurring alongside broader discussions about crypto regulation globally. In the United States, Treasury Secretary Scott Bessent recently stated that advancing stalled crypto legislation, such as the Clarity Act, would help stabilize the market and restore investor confidence. Bessent acknowledged Bitcoin’s inherent volatility but suggested that some of the current instability is “self-inflicted,” stemming from regulatory uncertainty. He emphasized the need for a market structure agreement between the cryptocurrency industry and the banking sector, with a target date of March 1st.
The Polish president’s repeated vetoes underscore the complex balancing act facing governments as they attempt to regulate the rapidly evolving crypto landscape. While the desire to protect consumers and prevent illicit activities is paramount, policymakers must also consider the potential impact of regulations on innovation and economic growth. The outcome in Poland will likely serve as a case study for other nations grappling with similar challenges, demonstrating the potential consequences of both overregulation and a lack of clear regulatory frameworks.
The current stalemate leaves the future of crypto regulation in Poland uncertain. It remains to be seen whether the government will attempt to override the president’s veto or if a compromise can be reached that addresses the concerns of both sides. For now, the Polish crypto market remains in a state of flux, awaiting clarity on the path forward.
