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Hungary considers allowing banks to offer Bitcoin and crypto services

The proposed rules are planned to take effect on June 30.

Hungary considers allowing banks and institutions to offer Bitcoin and crypto services

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The Hungarian government has introduced draft legislation that would let banks, investment funds, and asset managers offer Bitcoin and other crypto services, according to a report from Bloomberg Law today. With this initiative, Hungary’s authorities seek to align the nation’s regulatory framework with relevant European Union legislation.

Draft legislation is a preliminary version of a law that is still under development. It has been proposed but has not yet been officially enacted and put into effect.

Under the proposed regulation, the Hungarian Central Bank, Magyar Nemzeti Bank (MNB), is set to oversee crypto services nationwide. With plans to enact the regulation by June 30, this development marks a key step towards formalizing the crypto market in a nation that, until now, has lacked specific laws governing the use of crypto; no digital currency is currently recognized as legal tender in Hungary.

The MNB is also exploring the potential of a central bank digital currency but does not see an urgent need for a widely available CBDC.

The latest legislative proposal comes amid escalating tensions between the Hungarian government and the MNB.

According to a recent report from Bloomberg, Central Bank Governor Gyorgy Matolcsy accuses the government, led by Prime Minister Viktor Orban, of planning to undermine the central bank’s independence through proposed legal changes. Matolcsy criticizes the government’s economic policies, specifically their stimulus measures, and sees the legislative proposal as a direct threat to the institution’s autonomy.

In response, the government defends its proposal as a means to enhance transparency and promote responsible financial management without intruding upon monetary policy decisions.

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