MiCA revolutionised European crypto, and left Poland licking its wounds

Poland should have been one of MiCA’s greatest beneficiaries. It had a substantial community of over 2,000 registered virtual asset service providers, experienced entrepreneurs, one of the EU’s largest economies, and one of Central and Eastern Europe’s most established crypto ecosystems. Yet, as Europe moves into its regulated future, those in Poland have been left questioning whether the crypto industry they knew and loved will ever be the same again. For many, the dream and ambition crypto once offered has been well and truly snuffed out.

Mateusz Kara is the Founder and CEO of Morphic Financial Group, the London-based holding company building a new generation of regulated digital financial services businesses across Europe.

Poland’s self-inflicted terminal blow

MiCA was designed to create a common regulatory framework across all 27 member states, but the transition toward it has been anything but equal. When Poland’s politicians were unable to prevent the worst from happening, the EU did little but watch.

Poland became trapped in a domestic political battle over how the regulation should be implemented. The disagreement centered on competing arguments over consumer protection and national security on one side, and concerns that excessive regulation would drive Polish crypto companies abroad on the other.

On July 1, Poland’s Ministry of Finance confirmed that the MiCA transition period had ended and that registration on Poland’s existing virtual currency register no longer provided the legal basis to operate as a VASP or CASP. From that point, crypto services could only be provided by entities holding valid MiCA authorization. The gulf between the scale of that existing ecosystem and the number of businesses able to continue under MiCA illustrates the severity of what has happened.