Poland’s MiCA veto: why the national act failed

Poland has just become the first EU country to publicly break the rhythm of MiCA’s implementation – not by opposing the regulation itself, but by rejecting its own national act meant to enforce it.

On 1 December, Polish President Karol Nawrocki vetoed the Ustawa o rynku kryptoaktywów – a national law intended to implement the Regulation (EU) 2023/1114 (MiCA). The decision immediately shifted expectations for crypto-asset service providers (CASPs) preparing to operate under the new EU-wide framework.

The veto does not challenge MiCA itself. Instead, it targets the Polish legislative proposal designed to enforce MiCA at the national level. According to the President’s Chancellery, the draft contained provisions that threatened economic freedoms, undermined competitiveness, and imposed disproportionate burdens on businesses.

This development highlights a central tension: while MiCA is directly applicable across the EU, its practical enforcement relies on national implementation acts. Poland has now paused that process.

Core reasons behind the veto

The President’s position, articulated by spokesperson Rafał Leskiewicz, centres on three key concerns.

Broad and opaque powers to block domain.

One of the most controversial elements was the creation of a domain-blocking framework, under which the Polish Financial Supervision Authority (KNF) could order telecommunications providers, hosting services, and domain registrars to disable or cancel access to a company’s website within 48 hours. While MiCA requires Member States to establish enforcement mechanisms, the Polish draft granted the KNF highly expansive and immediate powers, including the ability to force cancellation of a domain name and re-registration of the domain in the name of the regulator.

The procedure provided minimal judicial oversight, broad discretion regarding what constituted a breach, and the risk that lawful businesses could be cut off from the market “with a single click.” From the President’s perspective, such a mechanism created an enforcement tool disproportionate to its stated aim and vulnerable to administrative overreach.

Regulatory overreach and unnecessary complexity.

In contrast to neighbouring Member States that implemented MiCA through short, technical acts aligned with the regulation’s harmonised structure, the Polish version expanded into more than 100 pages of additional obligations, duplicative procedures, and national-level requirements not foreseen by MiCA. Detailed analysis showed overlaps between MiCA procedures and domestic supervisory processes, additional notification duties, and broad discretionary powers for the KNF not present in the EU framework. This level of national “gold-plating” risked fragmenting the harmonised market MiCA was designed to create and potentially encouraging Polish crypto companies to relocate to more predictable EU jurisdictions.

Disproportionately high supervisory fees and sanctions.

Equally significant were the supervisory fees and sanctions, which the Chancellery deemed excessive and structurally misaligned with MiCA’s proportionality principle. The bill introduced authorisation fees of up to €4,500, recurring annual supervisory contributions calculated at up to 0.4% of revenue, and a long list of administrative charges not required by MiCA. For many Polish startups, these costs would have created financial barriers to entry that did not exist in other EU Member States implementing the same regulation.

The sanctions framework was even more severe: administrative fines for certain breaches reached over PLN 22 million, while criminal sanctions, including imprisonment, were attached to procedural violations such as delayed notifications, technical non-compliance or failure to update documentation. In several cases, the penalties exceeded EU comparators by multiples, risking, as the President noted, “the criminalisation of innovation rather than its supervision.”

Moreover, the draft assigned the KNF a uniquely extensive catalogue of prerogatives over CASP licensing, inspections, marketing restrictions, and operational conduct. Although MiCA grants supervisors substantial authority, the Polish act amplified these powers through parallel national controls that risked undermining regulatory predictability.

Taken together, these issues explain the President’s decision to veto the law. Instead of supporting the smooth implementation of MiCA, the draft created an overly heavy national framework that could hold back the development of Poland’s crypto-asset sector and make the Polish market more burdensome to operate in than other EU jurisdictions.

Implications for Poland’s crypto market

The veto means Poland will not align fully with MiCA in December as previously planned. This creates a period of uncertainty for CASPs that were preparing to seek authorisation or registration under the new regime. Certain MiCA-related procedures, such as national supervisory fees, enforcement mechanisms, and penalty frameworks, now remain undefined.

While MiCA continues to apply across the EU, the absence of a national act complicates the operational environment in Poland.

Conclusions

Poland’s veto is not a rejection of MiCA, but a rejection of an overly expansive domestic act that risked undermining economic freedoms and the competitiveness of the Polish digital-asset industry. The EU aims for harmonisation through MiCA, but Poland’s attempt at implementation demonstrated how national deviations and additional requirements can distort that goal.

The coming months will determine whether Poland can craft a more proportionate, innovation-friendly law that integrates MiCA’s standards while supporting the development of a competitive crypto-asset market.

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