The Hungarian government is planning to allow local banks to market cryptocurrency directly by establishing a thorough regulatory framework.
The country’s decision to embrace cryptocurrency coincides with the impending implementation of MiCA, the EU’s law on markets for crypto assets, in 2024.
The Ministry of National Economy (NGM) presented the Hungarian government’s proposed legislation regulating cryptocurrency marketplaces earlier this month.
“The draft legislation made note of the fact that the proposed law would control the future tradability of digital investment instruments,” according to a local publication.
The suggestion states that NGM prioritized two main themes. The first is that conventional banks should start offering crypto services. However, domestic banks have the option to provide cryptocurrency to their consumers directly.
It went on to say that the Hungarian National Bank (MNB) will be in charge of overseeing cryptocurrency holdings inside the country. Nevertheless, MNB would just be responsible for overseeing local token trade and not the Bitcoin market as a whole.
There is no pressing need for a widely distributed central bank digital currency (CBDC), according to Hungary’s assessment last year. However, a senior executive from MNB pointed out that the EU member is doing experiments to see if one may assist the unbanked.
“Hungary would want to continue at the forefront of CBDC research,” according to Anikó Szombati, Chief Digital Officer of MNB.
“When thinking about CBDC, it’s important to determine whether you’re driven by a strong policy goal or a significant market failure.”
She went on to say that the country is looking into the potential of issuing a CBDC in the near future. Szombati elaborated by saying that one motivation may be to increase banking access; currently, 13% of adults in Hungary do not have a bank account.
Their first real retail CBDC pilot project in the EU was launched in June 2023 by MNB and Perfinal, a financial services startup.
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