Poland’s failure to process a bill implementing the European Union’s MiCA crypto regulatory framework is fuelling a push by local crypto companies to move abroad.

On April 21, Cointelegraph reported that Poland’s parliament failed again to overturn a presidential veto. That leaves Poland as the last EU member state yet to incorporate MiCA into domestic law.

At issue is the crypto assets market law passed by parliament in November. The law is intended to align Poland’s legal system with MiCA, but Polish President Karol Nawrocki (카롤 나브로츠키) has used his veto twice, saying that “excessive regulation could burden small companies”. Supporters of the bill, by contrast, see a prolonged regulatory vacuum as making the market more vulnerable to fraud and illegal activity.

The problem is the tight deadline. MiCA’s transition period ends on July 1, and without a solution by then, Polish firms could find it harder to compete in the European market. Some companies have already begun moving operations abroad.

The industry is taking issue with what it sees as excessive regulation in the bill. In a letter in October last year, the Warsaw Enterprise Institute said the bill and draft subordinate regulations together exceed 300 pages, calling the rules excessively bloated compared with other EU countries that have set out frameworks spanning only several dozen pages. It also flagged provisions that ban basic crypto-related marketing and allow websites to be blocked by administrative decision without the right to appeal in court. The institute said such measures go beyond what MiCA requires and put Polish companies at a disadvantage versus firms in other EU countries.

Another controversy is that the new framework would give too much power to the Polish Financial Supervision Authority (KNF). The bill would make the KNF the crypto market’s “single regulator” and give it authority to impose large fines and to manage and block a list of unreliable crypto domains.

The speed at which the watchdog handles licensing approvals is another variable. In a peer review of payment institutions by the European Banking Authority (EBA), the KNF’s approval processing time was cited as among the slowest in Europe.

Political confrontation is also continuing. The government resubmitted the same bill after the president’s first veto, but Nawrocki vetoed it again in February for the same reason. Economist Piech (피에흐) said the president had already judged the bill as violating constitutional principles and as excessive and ambiguous, meaning signing a nearly identical bill would have amounted to overturning his own logic. He said the second push appeared to be an attempt to pressure the president into changing his constitutional stance rather than seeking compromise.

Some in the crypto industry view the veto not as opposition to regulation but as adherence to principles. Slawomir Zawadzki (슬라보미르 자바즈키), co-CEO of crypto exchange Kanga Exchange (KNG), said of the situation that “the veto was simply a demand for common sense in the legislative process”, adding that what the industry sought was not special treatment but proportionality.

Against that backdrop, discussions on new legislation are continuing. Polish Finance Minister Andrzej Domanski (안제이 도만스키) said the government has started work on a solution for a new crypto assets bill, and several political groups including Polska 2050 have also begun preparing separate drafts. Deep political divisions over crypto make it uncertain whether a deal can be reached quickly.

Restructuring is already under way on the ground. Kanga is considering a move to Latvia, citing MiCA-friendly institutions, fast procedures and relatively low supervisory fees. Robert Wojciechowski (로베르트 보이치에호프스키), chairman of the Polish Chamber of Commerce for Blockchain and New Technologies, said 70 to 80 percent of companies have gone abroad since the chamber was founded, and that colleagues have recently been discussing a move to the Czech Republic. The presidential office also warned that excessive regulation is a sure way to push companies to the Czech Republic, Lithuania and Malta rather than Poland.

Large institutions have also already looked outside Poland. Przemyslaw Kral (프셰미스와프 크랄), CEO of Zonda Crypto, has said his firm has Polish roots and is the country’s largest institution, but has operated outside Poland for years. “We will remain a key player going forward, but many small Polish crypto companies will lose the opportunity to operate in the market,” he said.

The remaining variable is whether legislation can be passed before July 1. Piech said the realistic chances of passing the bill are not high. As a result, if a licensing path is not established in Poland, local companies are increasingly likely to be placed at a structural disadvantage.