The KNF still warns against cryptocurrencies

When the whole world invests in blockchain technology, and even individual countries issue their cryptocurrencies, our Polish Financial Supervision Authority continues to warn against cryptocurrencies. The new guidelines and cautions were published in a document issued on December 10, 2020, which has as many as 35 pages.

The Polish Financial Supervision Authority (KNF) has been warning against cryptocurrencies for several years. On November 22, 2017, even a large document was published that drew attention to the risks associated with the cryptocurrency market. According to officials, not much has changed since then, so it was decided to issue another document that will once again warn against cryptocurrencies.

The position of the Polish Financial Supervision Authority on the issuance and trading of crypto assets can be found here (PDF).

The document reads, among others:

"Due to the unregulated legal status of crypto assets, the issue, purchase, use, and trading in them may be associated with various types of risks, including in particular the inability to enforce claims related to the acquisition of a given crypto-asset, the risk of losing access to it, or a significant decline in the value of the crypto asset, irrespective of the assessment of this type of supervisory activity by the Commission. "

The KNF refers to the lack of standardization and legal certainty in the approach to the use of crypto assets on the Polish financial market. The position, however, applies only to crypto assets to which, due to the issuer's seat, physical location (including servers), the seat of the trading platform owner, the place of residence or the seat of buyers or other formal and legal circumstances, it is justified to apply the provisions of Polish law.

Not only a bogey, a lot of knowledge

Fortunately, the document includes not only warnings, but also a large pill of knowledge that will be useful primarily to people who are not experts in the world of cryptocurrencies and blockchain technology. They are described, among others types of tokens, explained how they work and what they were created for. There are also many specific references to the current legal status in Poland regarding digital assets. Virtually every chapter lists all the legal acts that relate to it.

The Polish Financial Supervision Authority also reminds that providing advisory services in the field of crypto assets and facilitating their acquisition are activities regulated by Polish law, the detailed guidelines of which are included in the laws on investment advice. In this case, there is no difference in advising on, for example, stocks or cryptocurrencies.

Other countries are investing in cryptocurrencies

The approach to cryptocurrencies in other countries is not only more liberal, however. More and more countries are investing in their own digital money. It has been a sensation in Venezuela for a long time Petrowhere even pensions are paid. 

From Poland's point of view, Venezuela may seem a rather exotic and distant country. But China also has its own cryptocurrency, with which - even in terms of trade - we have more and more connections. There, the tests in metropolises of millions are already very advanced and the Middle Kingdom is very pleased with their progress. 

The digital yuan may revolutionize trade with China, because the traditional one is not directly convertible into all currencies, which increases the costs of foreign trade. In the case of cryptocurrencies, the costs are so small that Chinese products will still be able to compete in terms of price with products from countries where the work is worth even less than in China.