Poland Introduces Europe's Most Stringent Crypto Law Amid Industry Pushback

Polish Parliament Passes Digital Asset Market Act

The Sejm, Poland’s lower house of parliament, has approved the Digital Asset Market Act, a regulatory framework that has sparked considerable dissent among industry stakeholders and political figures. The law, aimed at establishing a licensing regime for Crypto Asset Service Providers (CASPs), also imposes significant fines and criminal penalties for non-compliance.

This controversial bill, known as Bill 1424, was designed to align with the European Union’s Markets in Crypto-Assets (MiCA) framework, according to reports from Cointelegraph on September 29. With the Sejm's approval, the bill moves to the Senate for further review before being sent to President Karol Nawrocki for final ratification. If signed into law, it will require all CASPs—including local and international exchanges, issuers, and custodians—to obtain licensing from the Polish Financial Supervision Authority (KNF).

Stringent Licensing Requirements Spark Contention

The legislation outlines an extensive application process for CASPs seeking licenses. Applicants must submit comprehensive documentation detailing their governance structures, internal capital reserves, compliance frameworks, risk management systems, and Anti-Money Laundering (AML) safeguards. Operators will be granted a transitional six-month period to secure these licenses. Failure to meet the licensing deadline will result in severe legal consequences, including fines of up to 10 million zloty (approximately $2.8 million) and prison sentences of up to two years.

Industry and Political Opposition to the “EU’s Harshest Crypto Law”

Despite narrowly passing with 230 votes in favor and 196 opposed, the legislation has faced strong criticism for its perceived overreach. Both industry leaders and political figures have expressed concern that the stringent measures could harm Poland’s nascent digital asset market.

Janusz Kowalski, a member of the opposition Law and Justice Party (PiS), has dubbed the bill “the longest and most stringent cryptocurrency law in the EU.” He criticized it as an overly bureaucratic, 118-page regulatory hurdle and noted that Poland’s requirements are significantly more complex compared to other EU nations like Germany and the Czech Republic.

Tomasz Mentzen, another high-profile politician, also voiced his concerns, specifically taking aim at the KNF. Mentzen criticized the regulatory body for inefficiency, pointing out that its average licensing review process takes 30 months—one of the slowest timelines in the EU. He warned that such delays could paralyze Poland’s blockchain and stablecoin industries, leading to the exodus of crypto-related businesses. Mentzen urged the Senate and President Nawrocki to block the bill to avoid stifling the sector.

President Karol Nawrocki’s Position on Cryptocurrency Regulation

The backdrop of Poland’s recent presidential election adds further complexity to the debate. President Karol Nawrocki, reelected in June with a narrow victory of 50.9% of the vote, has pledged to adopt a balanced approach to innovation and regulation. During his campaign, Nawrocki emphasized his commitment to supporting technological progress while avoiding measures that could undermine personal and economic freedoms.

“Innovation in Poland must emerge not from regulation but from autonomy,” Nawrocki stated during his campaign. “I guarantee there will be no enactment of oppressive policies that curtail freedom.”

His election rival, Sławomir Mentzen, also expressed crypto-friendly views during his campaign. Mentzen proposed that Poland establish a national Bitcoin (BTC) reserve, gaining traction among crypto enthusiasts. He ultimately finished third in the race, securing 14.8% of the vote in the first round.

Far-Reaching Implications for Poland’s Crypto Market

If signed into law, the new legislation is poised to drastically alter Poland’s digital asset landscape, which currently encompasses an estimated 3 million investors. While proponents argue that the bill is necessary to bring Poland in line with EU standards and ensure a sustainable regulatory environment, critics warn of its potentially stifling effect.

Stricter licensing requirements and extended KNF approval timelines could deter foreign operators from entering the market, pushing domestic businesses to move to more lenient jurisdictions. The compounded effect of these measures could suppress innovation, limit consumer choice, and impact the growth of Poland’s blockchain and cryptocurrency industries.

The fate of this contentious legislation now hinges on the Senate’s review and President Nawrocki’s final decision. The coming months will determine whether this regulatory push moves forward or if alternative, less stringent measures are considered to foster growth and maintain Poland’s position in the rapidly evolving digital asset space.