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Hungary’s Central Bank Chief Supports Crypto Ban

The Central Bank of Hungary's governor has sided with the Bank of Russia's view on crypto.

Hungary’s Central Bank Chief Supports Crypto Ban
Photo Credit Zsolt Szigetváry/MTI

Key Takeaways

  • György Matolcsy, the governor of the Central Bank of Hungary, has sided with the Bank of Russia by supporting a crypto trading and mining ban.
  • Matolcsy also cited his support for the top EU regulator who suggested a Proof-of-Work ban, though said regulator did so for environmental reasons, unlike Matolcsy.
  • The Bank of Russia seems to have been overruled by other Russian authorities.

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The governor of the Central Bank of Hungary, György Matolcsy, has come out in support of the banning of crypto trading and mining. In a press release today, Governor Matolcsy expressed his agreement with the Bank of Russia’s proposal to ban both trading and mining of cryptocurrencies. 

Central Bank Governor Supports Ban

Support for a ban on cryptocurrencies is circulating in Europe again, this time in Hungary.

György Matolcsy, governor of Hungary’s Central Bank, said today that he supported the Russian Central Bank’s proposal for banning crypto investing and mining that was put forward on Jan. 20. Governor Matolcsy also said he was in favor of the proposed ban on Proof-of-Work mining put forward by one leading EU regulator on Jan. 19. 

Matolcsy expressed concern about the role of cryptocurrencies in illicit activity, saying it was “clear-cut that cryptocurrencies could service illegal activities.” He also expressed reservations about the growth of “financial pyramids.” The central bank governor cited the Bank of Russia’s warning of “bubbles” sprouting forth from “the breakneck growth and market value of cryptocurrencies…defined primarily by speculative demand for future growth.”

Governor Matolcsy said that unity within the EU was needed to prevent “the building up of new financial pyramids and financial bubbles.” He did, however, emphasize that citizens of the EU, as well as companies, “would be allowed to own cryptocurrencies abroad,” if regulators were able to “track their holdings.”

The vice-chair of the European Securities and Markets Authority, Erik Thedéen, presumably the top EU regulator for whom Matolcsy pledged support, argued on Jan. 19 in favor of a Proof-of-Work ban for different reasons than the governor of the Central Bank of Hungary. Thedéen argued for a Proof-of-Work ban due to environmental concerns rather than the predominantly financial concerns that Matolcsy aired. 

Matolcsy parroted the view of the Bank of Russia, which proposed a ban of crypto mining and trading on Jan. 20. Nevertheless, the next week, agencies and authorities in Russia seemed to overrule the central bank’s proposal, opting instead for regulations without a ban. Last week, Russia’s Ministry of Finance seemed to corroborate the view that regulation was favored over banning, arguing for crypto legalization and for banks to be allowed to trade cryptocurrencies. 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. 

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