The Polish Financial Supervision Authority (KNF) is starting to look into whether it will start regulating cryptocurrencies, a new project launched by the authority shows, as regulators and central banks start to consider digital assets more closely.
Earlier this month, the KNF launched a project called (translated) “Positions of the Polish Financial Supervision Authority regarding the issuance and trading of crypto assets”. This project will last until the end of this month.
The draft document provides definitions of basic concepts regarding digital assets. The document also outlines hypothetical examples of their use and how they could be classified under Polish law.
KNF released its first circular on crypto in 2018
The Polish regulator invites feedback from financial institutions on a proposed legal framework, with the aim to provide a “uniform approach to the regulatory issues of entities intending to deal with the issuance and trading of crypto assets,” the KNF said in a statement earlier this month.
The document released earlier this month on the 16th of July 2020, follows on from the KNF releasing a circular in 2018, in which the regulator said that it would not ban trading in cryptocurrencies or trading venues themselves. Since the publication of this circular, there has been little development within the country regarding cryptocurrencies.
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Poland’s history with crypto
Poland’s stance on cryptocurrencies is mixed. The traditionally conservative market has had its fair share of heartbreak when it comes to crypto. As Finance Magnates reported, Polish cryptocurrency exchange BitMarket suddenly closed down its operations in July of last year, citing “loss of liquidity” as its reason.
It was initially suspected that the exchange had been hacked, however, nothing had been confirmed. Since then, a company director, Marcin Aszkiełowicz, released a statement suggesting that hackers were behind the crypto exchange’s demise.
This, among with a number of other cryptocurrency scams, has created scepticism regarding digital assets within the country. However, that isn’t to say demand doesn’t exist.
Despite this scepticism, a number of brokers in Poland do offer contracts for difference (CFD) on virtual currencies, such as XTB, which is listed on the Warsaw Stock Exchange.
At this point, it is not clear what exactly the KNF will regulate under its cryptocurrency framework or if it will regulate anything at all. The regulator does have a history of defying EU-mandated laws, so it might not follow the same path as ESMA and other European regulators.