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New regulations come into force. How will they emerge on the cryptocurrency market in Poland? –

From October 31, the activities of exchanges and cryptocurrency exchange offices will become a regulated activity in Poland. A register of companies operating in this market will be established. Theoretically that’s good news – but the devil is in the details.

The beginning of the end of the market in Poland?

Although the Polish authorities are introducing long-awaited market regulations, there is still a lot of trouble in the background. Despite the fact that the aforementioned register will soon be created, the Polish Financial Supervision Authority continues to discourage banks from establishing relationships with entities that deal with cryptocurrency trading. As a result, there may be a situation in which someone registers his business as a cryptocurrency exchange office, obtains permission to conduct it, but does not open an account at the bank. In practice, this makes it impossible to run a business.

Does this mean the beginning of the end of the digital asset market in our country?

Regulations and Bitcoin

We asked prof. Krzysztof Piech, who for many years suggested to Polish politicians and officials how to regulate the cryptocurrency market.

Since 2013, I have been calling for the regulation of the cryptocurrency trading market in Poland – Piech tells us. – For the market to develop, clear rules of the game are needed – he adds.

What are the “rules of the game”? Prof. Piech points to the fact that the cryptocurrency community in Poland has already taken some steps on its own.

As part of the Polish Bitcoin Association, already in 2014, we developed minimum security standards for cryptocurrency exchanges and exchange offices, which we sent to, among others, the Ministry of Finance and the National Bank of Poland. In 2017, under the auspices of the Ministry of Digital Affairs, we developed a Code of Good Practice for exchanges and exchange offices. It was consulted with a wider group of institutions, including the police, prosecutor’s office and the Polish Financial Supervision Authority. It was one of the first such attempts at self-regulation in the world – he recalls.

As he claims “We could become the second Japan, South Korea in the world of cryptocurrencies – to be in the top five of the world’s avant-garde blockchain applications.”

Instead, the option was chosen to expel cryptocurrency companies from Poland by practically preventing them from opening bank accounts and by submitting notifications to the prosecutor’s office. This resulted in the loss of many jobs in the high technology sector and tens of millions of revenues to the state budget. This created a vacuum, which was used by a number of fraudsters, extorting Poles into tens or even hundreds of millions of zlotys – continues prof. Piech. – And we are talking about a revolution that may be comparable to, or even greater than, the Internet revolution.

There are also no illusions that, looking at the long-term new ideas of the authorities, are not good for the cryptocurrency market in Poland, or for our economy.

This is a great loss for our country due to the shortsightedness of the authorities and fear of new technologies. Instead, it should focus on extensive, high-quality financial education and cooperation with the market to create clear and predictable rules of the game. This was done in Switzerland, Japan, Malta, Lithuania and even China. Time will show how the current regulations will be adopted by the market. Its representatives did their best to show their willingness to cooperate with you – as one of the first in the world. For three years, however, other countries have been offering them more favorable conditions – and we are talking about businesses whose total capitalization will be valued in tens of billions of zlotys. It would be a great loss for the Polish economy if these successes would promote other countries, not our homeland. The flagship example is one of the first projects called Golem, run by my colleague from the same department at the Warsaw School of Economics, which for the outside world is a Swiss company – answers prof. Piech.

How will the market react to new regulations?

However, we also decided to ask what companies from the cryptocurrency market think about the new regulations.

Patryk Kempiński, the CEO of zamibitcoina.pl, has mixed feelings.

Each badly constructed regulation in a given industry has an adverse effect on it. This is also the case here. In the case of stock exchanges, there is no problem in Poland, because they are no longer in our backyard. Regulations, and most of all banks, have successfully pushed them beyond Polish jurisdiction – says Kempiński, whom you may also know from the Krypto Report channel. – Certainly, in the case of already existing cryptocurrency exchange offices, obtaining a license and continuing business will be easier than for just starting business related to the exchange of digital assets for zlotys. It does not change the fact that with obtaining a license, we end up on the black list of commercial banks. This can result in a wave of cancellations from bank accounts that are sorely needed to maintain consistent liquidity – he adds.

However, as he adds himself, he sees potential positives.

– I do not think that with obtaining the license, the narrative of the banks will change, but there is a small light in the tunnel, because with the license there is a limit of an occasional transaction without verification up to 1000 euros. As a result, the banks’ main argument – money laundering – will be overthrown – argues. – Our network of exchange-bureaux exchanges is already preparing several scenarios for the upcoming autumn and we are looking forward to further information on the implementation of the amendment to the act. – calms down.

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