Many individuals, both IT and financial nerds and regular folks, have taken an avid interest in cryptocurrencies in recent years. There are a number of factors contributing to the growth of the bitcoin market.
The Act on Anti-money Laundering and Countering the Financing of Terrorism (AML/CFT), of 2018 (the “AML Act”), defines virtual currencies, which include cryptocurrencies. As defined under the AML Act, a virtual currency is a “digital representation of value that is not:
- a unit of international clearance created by an international organization and acknowledged by individual nations adhering to or collaborating with such an organization;
- legal tender issued by the National Bank of Poland or another central bank or state authority;
- bills of exchange, promissory notes, and checks all qualify as “financial instruments” under the Trading in Financial Instruments Act of 2005, although “electronic money” under the Payment Services Act of 2011 does not.
A virtual currency is a digital representation of value that may be held, transferred, or traded in the same way that traditional currencies do. And in order to legally trade cryptocurrency, you need a special permit, which Fintech Harbor Consulting will help you get.
Do governments accept cryptocurrency as currency?
Bitcoin and other cryptocurrencies are not recognized as legal cash, but they do function as a medium of exchange and may be exchanged for conventional currency.
Why are people suddenly interested in cryptocurrencies?
In the first place, cryptocurrencies have emerged as a substitute for the fiduciary money that has traditionally underpinned monetary systems worldwide. Due to the fact that national central banks produce and manage fiat currencies, the value of these currencies is highly sensitive to the actions of these institutions. Both digital and physical forms of fiat currency are in circulation (as banknotes and coins). Unlike national currencies, cryptocurrencies exist only in digital form and are powered by blockchain technology; they are not backed by any government or central bank. Most nations do not accept payments using cryptocurrency under their legal systems. What time does the forex market open? – A Trade Nation article explains how the 24 hour market unfolds on a daily cycle.
The second problem that contributes to the rising popularity of cryptocurrencies is their anonymity, which simply means that there is no personal data of the users divulged in the accessible information on the transaction (unlike, for example, in the case of a standard bank transfer) (unlike, for example, in the case of a traditional bank transfer). Each user has their own cryptographic “wallet” that is represented by a unique string of random numbers and characters.
The European Commission has taken measures to solve this problem by voting at the end of March 2022 on a proposal that would entail collecting information on the owners of cryptocurrency wallets in order to abolish the anonymity of cryptocurrency transactions. In addition to the usual obligation to hold a special cryptocurrency license in Poland, cryptocurrency service providers, such as cryptocurrency exchanges and exchange offices, will have to carry out due diligence of customers in accordance with new updates to EU anti-money laundering rules. The details of a demand to submit all transactions above EUR 1,000 to authorities remain unclear. The proposed rules further erode cryptocurrency independence and freedom.
Significant new provisions of Poland’s AML Act went into effect on October 31, 2021.
All the following are prohibited under the new law:
- a virtual currency transaction for fiat money;
- services for virtual currency exchange;
- brokering (intermediation) of the trade of virtual currency;
- the creation and upkeep of virtual currency accounts (wallets), which are collections of identity information that let qualified entities utilize virtual currencies, including for exchange operations;
Crypto’s claimed invulnerability to governments, central banks, and regulators have been a selling feature. In recent years, cryptocurrencies have become more popular and riskier, prompting further regulation. Thus, many countries will limit crypto freedom.