MiCA revolutionised European crypto, and left Poland licking its wounds

The end of MiCA’s transition period was predicted to mark the beginning of a more mature European crypto industry for all EU member states, and in many respects, it will —or at least, it should. Europe now has a regulatory framework capable of providing consumers with greater protection, institutions with more certainty and compliant digital asset businesses with a clearer foundation for operating across borders.

Yet regulation never happens in a vacuum, and the experience of the past 18 months has exposed a significant divide between European markets, creating a fragmented regulatory landscape. While most EU countries have been able to turn MiCA into an opportunity, Poland’s domestic crypto industry has been caught between a new European regulatory regime and a political bind to establish the domestic framework needed to support it.

Poland should have been one of MiCA’s greatest beneficiaries. It had a substantial community of over 2,000 registered virtual asset service providers, experienced entrepreneurs, one of the EU’s largest economies, and one of Central and Eastern Europe’s most established crypto ecosystems. Yet, as Europe moves into its regulated future, those in Poland have been left questioning whether the crypto industry they knew and loved will ever be the same again. For many, the dream and ambition crypto once offered has been well and truly snuffed out.

Mateusz Kara is the Founder and CEO of Morphic Financial Group, the London-based holding company building a new generation of regulated digital financial services businesses across Europe.

Poland’s self-inflicted terminal blow

MiCA was designed to create a common regulatory framework across all 27 member states, but the transition toward it has been anything but equal. When Poland’s politicians were unable to prevent the worst from happening, the EU did little but watch.

Poland became trapped in a domestic political battle over how the regulation should be implemented. The disagreement centered on competing arguments over consumer protection and national security on one side, and concerns that excessive regulation would drive Polish crypto companies abroad on the other.

On July 1, Poland’s Ministry of Finance confirmed that the MiCA transition period had ended and that registration on Poland’s existing virtual currency register no longer provided the legal basis to operate as a VASP or CASP. From that point, crypto services could only be provided by entities holding valid MiCA authorization. The gulf between the scale of that existing ecosystem and the number of businesses able to continue under MiCA illustrates the severity of what has happened.

The consequence is not simply that companies disappear from a register. Businesses close, founders relocate, and investment follows them. Once regulatory expertise, compliance teams and capital have established themselves in Amsterdam, Frankfurt or elsewhere, rebuilding that ecosystem in Warsaw could take years. Polish investors hold an estimated €9.4 billion in digital assets; if this capital were to be relocated, it would be a hefty price to pay for a nation with one of the highest rates of capital gains tax in all of Eastern Europe.

The MiCA compliance imbalance

Part of the challenge is that everyone is still learning. MiCA’s principal provisions became applicable in December 2024, meaning the framework remains relatively new, both for regulators and for the entities operating within the market. Businesses are still learning how to be fully compliant, while regulators themselves are learning how best to supervise crypto entities.

Most regulators understand the market, but that experience is not universal across Europe. For companies navigating an entirely new regulatory environment, the sophistication of the regulator and the existence of a workable domestic authorization pathway can fundamentally determine whether they succeed.

Polish crypto companies therefore had little choice but to look elsewhere for authorization. Germany issued 57 licences, France issued 26 and the Netherlands issued 26, while Greece, Hungary, Poland and Romania issued zero between them. This imbalance made the licensing process almost impossible for large swathes of the EU and led to an entire continent pinning all its hopes on a handful of Western European nations.

Polish entrepreneurs, who invested heavily in DeFi and described MiCA in the early stage as ‘predominantly positive’, deserved the same opportunities as their Western European counterparts. Instead, many businesses that helped establish Poland as an early European crypto market reached the end of the transition period facing circumstances largely outside their control. Poland was once a liability on the EU’s balance sheet; today, it is one of the bloc’s largest economies. Yet the distribution of MiCA licences risks making the nation look, once again, like a second-class member state. In a world where Euroscepticism continues to grow, many within Poland will see this as an unfair hammer blow to a sensitive domestic geopolitical situation that could well have been avoided.

Greater certainty comes at greater cost

Even with a functioning licensing pathway, MiCA has fundamentally changed the economics of starting and operating a crypto business. It is now a far more nuanced and costly process that not everyone can afford. Many entities will simply be unable to meet the requirements because of capital constraints.

Previously, founders with a strong idea and sufficient capital to build a product could enter the market and establish whether customers wanted it. Today, companies providing regulated crypto services must consider licensing, governance, compliance infrastructure and regulatory capital before they can realistically begin competing. The process can cost up to €700k, while serious violations can attract multi-million euro penalties. There is increasingly little room for small players, and it will become harder for new grassroots crypto businesses to enter the market.

However, one benefit is that accelerated consolidation should weed out some of the industry’s weaker operators, creating a new wave of tier-one companies capable of interfacing traditional and digital assets under one roof. Smaller and less secure businesses will close, seek buyers or operate through larger regulated infrastructure providers. This, in turn, creates a safer market for users while simultaneously raising the barriers faced by entrepreneurs.

Eastern Europe will take years to recover

For Poland, the MiCA-inflicted impact could be profound. These ecosystems were built from the bottom up. They succeeded because entrepreneurs could experiment, develop infrastructure and respond quickly to grassroots demand for digital assets. MiCA changes that dynamic: the next generation of regulated crypto businesses will require a significant level of compliance infrastructure before achieving meaningful scale.

Countries that created functioning regulatory pathways therefore have an enormous advantage. Poland, meanwhile, risks becoming little more than a market for others to sell into rather than an active participant in building Europe’s digital financial future.

That is why the impact of this transition could extend far beyond 2026. Once companies relocate and investment moves with them, regulatory certainty alone will not necessarily bring them back. Poland has fought hard to secure its seat at the European table, and now, once again, its entrepreneurs risk feeling like the EU could’ve done more to support its domestic deadlock during such a pivotal time.

Europe can still emerge stronger

Despite this, MiCA will ultimately be positive for European crypto. Digital assets could never remain permanently outside the standards expected of mainstream financial services. If blockchain infrastructure and stablecoins are to become meaningful components of payments, settlement and institutional finance, companies operating in the sector must earn the trust of banks, businesses, regulators and consumers. The validation MiCA provides the industry should allow it to start solving real-world problems at a scale it has previously struggled to achieve.

Other major financial markets are moving in the same direction. The UK’s FCA is introducing a comprehensive cryptoasset regime, with applications beginning in 2026 ahead of the new rules taking effect in October 2027. The FCA explicitly describes its objective as strengthening consumer protection while creating a competitive environment for responsible crypto innovation.

That is the paradox of MiCA. Europe may emerge with fewer crypto companies, but also with a stronger, more trusted and ultimately more economically significant digital asset industry for its users and creators.

Can Poland come back swinging?

When no clear path has been set out, the outcome remains unknown for now. After watching one of Europe’s most vibrant crypto communities reach the end of the MiCA transition without the domestic regulatory pathway it needed to protect an ecosystem of around 2,000 registered entities, many in Poland may look back at 2026 as the year European crypto finally grew up, and one of Poland’s brightest economic ambitions faded into darkness.