Poland intends to become the latest European nation with a comprehensive regulatory framework for digital currencies in 2024, with reports revealing that the government will table a draft bill before parliament later this year.
For over three years now, Poland’s Financial Supervision Authority (KNF) has been licensing virtual asset service providers (VASPs). However, beyond registration, the country has yet to issue laws for the sector.
This could all change this year, with the government set to present a draft bill that gives supervisory power over the sector to KNF, Finance Magnates reports. Citing sources with knowledge on the matter, the outlet reported that the draft bill will be tabled before legislators in the second quarter of the year.
The bill will establish KNF as the primary digital asset watchdog, similar to its peers’ roles in other countries, including in neighboring Germany, where BaFin has been overseeing digital currencies, and the FCA in the United Kingdom.
Under the proposed framework, KNF can take action against non-compliant VASPs, including imposing financial penalties. It can also take companies that conduct digital currency-related crimes to court.
Polish VASPs will also be covered under a confidentiality provision that will allow them to protect their customers’ data better. The framework also provides for the use of electronic contracts in lieu of paper documents for an industry that mostly relies on digital processes.
Sources say that the proposed regulations are aimed at preparing Poland for the integration of the EU’s Markets in Crypto Assets (MiCA) digital asset regulatory framework. While MiCA is the overarching framework, individual countries have created their own laws to localize the regional framework to suit specific needs.
“The introduction of new regulations is dictated by the need to prepare a legal framework for the proper functioning of crypto asset markets, thereby ensuring effective supervision and investor protection by equipping the Financial Supervision Authority with the appropriate means,” an official government statement explains.
While the U.K., Switzerland, France, and other bigger economies get the spotlight on digital asset adoption, Poland has been the EU’s top destination for blockchain companies since 2021.
With over 1,060 firms, Poland accounts for around half of all blockchain companies in the EU, according to one source. Second-place Lithuania has half the number at about 550, with Italy a distant third with 129.
While not renowned as a tech capital, Poland has attracted the VASPs with its easy registration process. Getting a license in the Central European country takes just two weeks and a mere €150 ($163) in fees. In stark contrast, some jurisdictions like Hong Kong cost up to $20 million while others like Singapore take up to 12 months.
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