The Cryptocurrency Regulatory Landscape in Poland Prior to 2023

Before 2023, Poland’s approach to cryptocurrency regulation was marked by a blend of caution and forward-thinking initiatives, creating a unique environment for digital asset activities.

Legal Definition and Government Stance: Polish law defined virtual currency as a digital representation of value, distinguishing it from fiat money, electronic money, financial instruments, promissory notes, or cheques. While virtual currencies were not considered legal tender for government interactions, their use in fulfilling payment obligations was permitted if agreed upon by the parties involved. Notably, virtual currencies and related services were not under the supervision of the Polish Financial Supervision Authority (PFSA)​​.

Anti-Money Laundering Compliance: In line with Polish anti-money laundering (AML) laws, virtual currency service providers (VCSPs) were required to meet specific requirements, including the establishment of internal AML and Know Your Customer (KYC) policies, appointing a responsible employee for AML obligations, and implementing necessary procedures for business relationship monitoring and customer identification. A key regulatory requirement for VCSPs was to be registered in the Polish Register of Virtual Currency Activities, operated by the National Revenue Administration​​.

Taxation of Cryptocurrency Transactions: Cryptocurrency transactions in Poland were subject to taxation. The country treated cryptocurrencies as taxable assets, requiring individuals and businesses to report cryptocurrency-related income and gains for tax purposes​​.

Fostering a Favorable Environment for Fintech and Blockchain Startups: Poland had taken steps to create a favorable environment for fintech and blockchain startups, including the launch of a regulatory sandbox by PFSA and the “Startup Poland” initiative. These efforts were aimed at encouraging innovation while maintaining consumer protection. However, the government remained cautious about the risks associated with cryptocurrencies, such as money laundering and funding illegal activities​​.

Cryptocurrency Mining: There were no specific regulations prohibiting or restricting cryptocurrency mining activities in Poland. However, miners were expected to comply with general regulations related to electricity consumption, land use, environmental protection, and taxation requirements​​.

Border Restrictions and Declaration: No specific border restrictions or obligations were in place for declaring cryptocurrency holdings when entering or leaving Poland. However, travelers were advised to stay informed about evolving cryptocurrency laws and regulations​​.

Estate Planning and Testamentary Succession: Cryptocurrency treatment for estate planning and testamentary succession was a developing area of law in Poland. While there were no specific regulations addressing cryptocurrencies in this context, general principles of Polish inheritance law applied to them as they would to other types of assets​​.

In summary, prior to 2023, Poland’s legislative framework for cryptocurrencies was characterized by a careful balance between regulation and innovation. The country acknowledged the potential of digital currencies and blockchain technology while ensuring compliance with AML requirements and consumer protection.

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