First e-money institution, i.e. blockchain in the Polish practise of KNF

On April 23^rd 2019 the Polish Financial Supervision Committee (KNF) issued a license for issuance of electronic money as well as for providing payment services as a national electronic money institution to the company Billon Solutions sp. z o.o. seated in Warsaw. The scope of business conducted by Billon Solutions sp. z o.o. covers both issuance of electronic money as well as providing payment services with the use of said electronic money.

Billon Solutions sp. z o.o. is the first entity, intending to issue electronic money, to ever obtain a Polish license of an electronic money institution which in the opinion of the PFSA is fully corresponding to the statutory definition. The service of issuing electronic money and handling payments with this currency will be provided using blockchain technology.

The KNF decision is a breakthrough because it is the first license of an electronic money institution issued under the Payment Services Act of 19 August 2011. The PFSA’s statement is quite significant, according to which Billon Solutions sp. z o.o. is the first entity intending to issue electronic money fully in line with the statutory definition. It should be pointed out here that the understanding of the concept of electronic money by the PFSA was so far very rigorous, different from the understanding of the majority of regulators of other EEA countries, despite the fact that EMD2 was based in the same Directive. The above is reflected, for example, in PFSA’s communications, which result in the following obligatory features of electronic money:

1. Electronic money is not the same as „bank money”, i.e. it is not an accounting record indicating the obligation of the bank (payment service provider) to pay a specified sum of money. In contrast to „bank money”, electronic money is a monetary value stored electronically, but this storage must be associated with the possession of a specific instrument on which these values ​​are stored or which is used to gain access to IT resources, under which monetary values ​​are stored.
2. Electronic money is a monetary value issued in exchange for cash (banknotes, coins) or „bank money”,
3. Electronic money is issued only for the purpose of making payment transactions,
4. Acceptance of electronic money is not the responsibility of every potential payment recipient, it is only an option that the recipient can accept if it is allowed by technical conditions
5. The operation of electronic money (i.e. making payments) may only take place in a kind of closed system consisting of the electronic money publisher and its users (payers, merchants). Consequently, electronic money cannot be accepted outside the system.

We express our conviction that Billon Solutions sp. z o.o. will pave the way for more entrepreneurs. At the same time, we invite you to contact our Law Firm, as we provide comprehensive services related to obtaining PFSA permits.