Staking ban in the draft of the Cryptoassets Market Act?
At the beginning of December, another draft Cryptoassets Market Act (the Draft) was published on the website of the Government Legislation Centre. The Draft addresses complex issues related to crypto trading after the MiCA regulation comes into force, range from a description of the transition period for entities listed on the VASP register, the blocking of websites offering illegal crypto-related services, or just the aspect of crypto-based lending.
New regulations, the end of staking?
Article 13 of the Draft introduces a comprehensive ban on crypto-related loans. It is worth noting that the ban applies to:
- brokering crypto-asset loans for clients by receiving and transmitting orders for crypto-assets,
- to enter into cryptoasset lending transactions in their own name and on behalf of the principal or in the name and on behalf of the principal.
Staking (a service involving the transfer of cryptoassets from one entity to another for a specified period of time in exchange for payment) does not have a uniform legal classification. In essence, it can be considered a loan when the terms and conditions of the service clearly indicate that ownership of the funds is transferred and that the borrowed funds must be returned to the entity that originally provided them.
This means that, as it stands, the ban is likely to result in a significant reduction in the popularity of staking within the cryptocurrency industry.
What are the reasons for the ban?
In the Draft’s justification, it was argued that the prohibition stems from the lack of any regulations in the Polish legal order governing crypto-related loans. Furthermore, reference was made to the content of recital 94 of the MiCA Regulation, which explicitly indicates that the MiCA Regulation should not regulate crypto-related lending, leaving a free hand to Member States. In other words, the MiCA regulation should not serve as the basis for regulating cryptoasset lending.
Doubts
The establishment of a prohibition referring to the MICA Regulation, which explicitly indicates that it will not standardise this issue, is controversial. According to the Ministry of Economic Development and Technology analysing the provisions of the Draft, recital 94 of the MICA Regulation should be interpreted in the opposite way, i.e. national law should lead to the creation of a legal framework for crypto-related lending rather than banning it altogether.
Is Poland’s crypto market facing drastic changes?
The proposed ban does not appear to be properly justified, in particular on the basis of the provisions of the MICA Regulation. Nevertheless, given that the legislative process is still ongoing, neither adoption of the ban as described, modification of the scope of the ban, nor abandonment of the ban altogether can be ruled out.
Undoubtedly, the last option would be the most favourable solution for the market given the prevalence of the service on crypto-asset exchanges and the lack of analogous bans in other EU Member States.
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