Hungarian Central Bank Governor Favors Crypto Ban

Hungarian National Bank Governor György Matolcsy is in favor of a crypto ban, following an earlier suggestion by Russia’s monetary authority.

“I perfectly agree with the proposal,” Matolcsy said in response to Russia’s central bank initially proposing a ban on cryptocurrency trading and mining last month. He emphasized a unified EU approach to deal with cryptocurrencies’ financial risks.

“It is clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids,” the governor stated in his announcement. Matolcsy then cited the Russian monetary authority, who warned that “the breakneck growth and market value of cryptocurrencies are defined primarily by speculative demand for future growth, which creates bubbles.” 

Matolcsy concluded by signaling for collective action “in order to preempt the building up of new financial pyramids and financial bubbles.” He also said he supported the EU financial regulator in banning the energy-intensive proof-of-work method of cryptocurrency mining throughout the EU. Ultimately, he acknowledged that EU citizens and companies could own cryptocurrencies abroad and that regulators would track their holdings.

Russian crypto debate

Russia’s central bank had initially suggested banning the use, exchange, and mining of crypto in a paper discussing the role of cryptocurrency in the Russian financial sector last month. “We believe it is necessary to prepare a federal law, establishing a ban on the issue and circulation on Russian territory of private digital currencies and also to determine liability for violating this ban,” the central bank declared.

However, this was rebutted the following week by Russia’s ministry of finance, who said they believed regulation to be preferable to restrictions. “The Ministry of Finance is actively involved in the development of legislative initiatives in terms of regulating this market,” said Ivan Chebeskov, financial policy department director at the Ministry of Finance. Following a request by President Vladimir Putin to come to a consensus on the matter, authorities agreed on a roadmap for crypto regulation.