Hungary Plans to Develop Its Own Central Bank Digital Currency

György Matolcsy, the current Governor of the Hungarian Central Bank, shared their plans about a Hungarian central bank digital currency earlier this month. No date has been set for the launch of the digital asset yet. According to Matolcsy, they “should work out” the details in the next few years.

Hungary has to launch the CBDC in the next few years to ‘win the rest of the decade’

In an interview during the Magyarország újraindul (Hungary restarts) conference, György Matolcsy has shared the Hungarian Central Bank’s plan to launch a central bank digital currency (CBDC). As of now, they are still working out the details of the digital Forint, and as such, there is no hard timeline for the project.

“We should work out and launch everything in the early years of the decade in order to win the remaining two thirds [of the decade],” he said in the interview while talking about the potential launch of the CBDC among other projects.

In the interview, Matolcsy has also elaborated on why the development of a Hungarian CBDC is not only necessary but beneficial for the economy and the Hungarian people. Central banks have been around for more than 400 years, and according to Matolcsy, “they cannot function in the same way they did 400, 300 or 200 years ago”. He added that the digital revolution that is taking place now allows the central banks to not only print paper money but also a digital one using new technologies.

Matolcsy believes that, by the end of the decade, almost all central banks will launch their own CBDCs, including Hungary.

He also explained that a Hungarian CBDC could make the banking system and financial transactions cheaper and faster. It could also provide people with cheap and accessible credit lines that could be made available “for their whole lifespan”. Due to the technological advances, the digital currency could also improve the security of financial transactions.

Hungary seems to be opening up to digital currencies and the underlying technology. Earlier this year, Mihály Varga, the Minister of Finance also announced that they would lower taxes on cryptocurrencies from 30.5% to only 15% starting next July.