- Polands crypto bill remains blocked after MPs fell 25 votes short of an override.
- The veto leaves Poland without a fully functioning domestic MiCA licensing system.
- About 2,000 Polish crypto firms may need to seek MiCA authorization elsewhere.
Poland‘s crypto regulatory deadlock continued Friday after lawmakers failed to overturn President Karol Nawrocki’s veto of legislation designed to regulate the cryptocurrency market and establish a domestic licensing system under the European Unions Markets in Crypto-Assets Regulation, or MiCA.
The defeat leaves Poland without a fully functioning framework for crypto firms seeking authorization at home, while companies face decisions over whether to seek licenses elsewhere in Europe.
The Sejm voted 241-198 in favor of overriding the veto, while three lawmakers abstained. However, supporters needed 266 votes, leaving the government 25 votes short of the required three-fifths majority. Nawrocki has now vetoed the proposed legislation three times.
Poland Crypto Bill Divides Government and President
The Polish crypto bill would designate the Polish Financial Supervision Authority (KNF) as the regulator overseeing the country‘s crypto market. Nawrocki has argued that the legislation goes beyond what is necessary and could push Polish crypto businesses to relocate. He has also criticized provisions that allow authorities to block websites and restrict companies’ activities.
Discover more
Digital Currencies
Distributed & Cloud Computing
Merchant Services & Payment Systems
Under the proposed framework, KNF could block accounts and freeze transactions for up to 96 hours, with the possibility of extending restrictions. Crypto-token issuers and service providers would also incur fees of 0.4% to 0.5% of the assets value. The regulator could additionally fine crypto businesses that violate the rules.
MiCA Licensing Gap Puts Polish Firms Under Pressure
The veto has wider consequences because Poland remains the only EU member without a fully functional domestic MiCA application and licensing system.
Around 2,000 virtual asset service providers are registered in Poland, but only a small number of Polish companies have obtained MiCA licenses in other EU member states. Without domestic authorization, firms can instead apply in countries including Lithuania, Latvia or Germany.
A MiCA license granted by one EU member allows a company to provide services across the 27-country bloc as well as Iceland, Liechtenstein and Norway. KNF spokesman said Polish legislation has not designated a competent domestic authority for most activities covered by MiCA, except electronic money token issuers.
Zondacrypto Investigation Adds Political Pressure
Fridays vote also came during an investigation linked to the collapsed Zondacrypto exchange. Before the vote, Prime Minister Donald Tusk urged lawmakers to support the bill and cited witness testimony involving former Justice Minister Zbigniew Ziobro.
Poland has requested Ziobro‘s extradition from the United States over separate allegations covering 19 of 26 offenses linked to his time in office. For now, the failed override leaves the Poland crypto bill blocked and the country’s domestic MiCA licensing framework unresolved.
Related:Polands President Vetoes Crypto Assets Bill Again, Citing Weak Rules