Hungary is gearing up to establish a comprehensive regulatory framework for cryptocurrencies, allowing local banks to offer crypto services directly. This initiative aligns with the impending implementation of the European Union’s Markets in Crypto Assets regulation (MiCA) in 2024.
The draft legislation on crypto markets, prepared by Hungary’s Ministry of National Economy (NGM), was recently unveiled by the government. According to reports, the proposed law aims to regulate the trading of digital investment instruments in the future.
Key highlights of the proposal include the integration of crypto services by traditional financial institutions, enabling domestic banks to provide cryptocurrencies directly to customers. Additionally, oversight of crypto assets will be entrusted to the Hungarian National Bank (MNB). However, the MNB’s role will focus on supervising domestic token trading rather than regulating the Bitcoin market.
Hungary plans to enforce these regulations starting June 30.
Regarding central bank digital currency (CBDC) initiatives, Hungary previously determined that widespread adoption of a CBDC was not immediately necessary. However, the country is exploring the potential benefits, particularly in reaching unbanked populations. Anikó Szombati, Chief Digital Officer of the MNB, emphasized Hungary’s commitment to CBDC research, citing a desire to remain at the forefront of innovation.
Szombati highlighted that increasing financial inclusion could serve as a driving factor for CBDC issuance, especially considering that 13% of Hungarian adults do not have bank accounts. In collaboration with banking services firm Perfinal, MNB launched the EU’s first live retail CBDC pilot project in June 2023.
Hungary’s proactive approach to both crypto regulation and CBDC exploration underscores its commitment to staying abreast of developments in the digital finance landscape.