Polish cryptocurrency market threatened by new regulations?

Poland can boast a dynamically developing cryptocurrency sector, in which over 1,2 thousand entities operate – including exchanges, exchange offices and bitcoin ATMs. Nevertheless, according to industry experts, upcoming changes in regulations may seriously affect this market, or even lead to its significant limitation.

A draft of a new law on crypto-assets aimed at introducing EU MiCA regulations (Markets in Crypto-Assets), may even force smaller market participants to withdraw from their activities. According to legislators, the new regulations are aimed at organizing the market and improving security, but there are growing concerns among entrepreneurs associated with cryptocurrencies about the veracity of this argument. The act provides for, among other things, the imposition of high penalties, the obligation to pay contributions to the Polish Financial Supervision Authority (KNF), as well as the introduction of strict requirements for companies dealing in cryptocurrencies.

Slawomir Zawadzki, Kanga Exchange

Sławomir Zawadzki, CEO of the Kanga cryptocurrency exchange, warns against the potential consequences of the new law:

– The so-called Polish cryptocurrency act is in the legislative process and we will soon learn its final shape. It is already known that the new regulations will impose numerous requirements and burdens on cryptocurrency entrepreneurs, which in practice will force smaller companies to close their operations. This applies especially to physical points where customers could buy and sell cryptocurrencies in direct contact with the operator. – says Sławomir Zawadzki, president of the Polish cryptocurrency exchange Kanga.

Will small cryptocurrency companies disappear from Poland?

The fate of over 1,2 thousand companies currently operating in Poland may be sealed, and it is estimated that only about 5% of them will be able to meet the new regulations.

– It was in these places that novice investors had the opportunity to obtain information on how to safely conduct transactions. Operators of stationary points are also able to assess whether the client is not acting under the influence of fraudsters. Unfortunately, after the introduction of new regulations, there may be significantly fewer such points – warns Sławomir Zawadzki.

Industry representatives also express their doubts about the lack of regulations that would force the banking sector to cooperate with cryptocurrency companies, as banks have long been reluctant to cooperate with this market segment. The problem of ostracism from banks and a lack of willingness to cooperate remains unresolved.

Less consumer protection

Concerns about the new regulations are understandable, especially in the context of the experience from Estonia, where similar regulations led to the almost complete disappearance of local cryptocurrency companies. At one time, there were over 1,5 thousand entities in the Estonian register, but after the introduction of strict regulations, this number decreased by 80%. The cryptocurrency industry in Poland fears that a similar situation could also occur here if the regulations are too restrictive.

The Ministry of Finance defends the proposed changes, saying they are aimed at creating a more transparent and secure market, where institutions such as banks and stock exchanges would play a greater role. Nevertheless, experts warn that excessive regulation could cause companies to flee abroad, which would limit innovation in Poland and lower the level of consumer protection.

The government is expected to announce the final shape of the bill in the coming weeks. Cryptocurrency industry representatives are eagerly awaiting its final version, which could introduce significant changes to the Polish cryptocurrency market. But will these changes be for the better?