After last year’s OneCoin fiasco, it’s understandable that many Hungarians are quite wary of anything related to cryptocurrencies. At that time, the Hungarian government and central bank warned locals about the dangers of trading within apparent pyramid schemes that issuers such as OneCoin had complete control over. This highly publicized investigation did a lot of good in that it made the public more aware of such schemes, but it also damaged the reputation of legitimate currencies, such as Bitcoin and Ethereum. Now, the question is: Is that damage reversible?
For experienced traders and those in business, the answer is, of course, yes. Those who work within the financial and cryptocurrency sectors understand the controlled Ponzi schemes associated with trading OneCoin have little to do with real cryptocurrency trading. However, local business owners are a different matter. Those who trade with international customers, need to understand that to keep up with the pack, they must adapt to digital forms of payment. If not now, then soon. Yet they still feel that it’s dangerous and unchartered territory.
And as far as the average person on the street is concerned, it’s even more difficult. In recent times, the only news relating to cryptocurrencies in Hungary was bad news. Warnings of scams and educational, journalistic pieces aimed at protecting the public were par for the course.
So, in effect, Bitcoin and the like need to start all over again with the Hungarian market, a market that is understandably wary of digital currencies.
But doubters of cryptocurrencies need only look as far as the poker industry to see how the blockchain can offer a more secure customer service that should be the envy of any banking institution. CoinPoker, for example, is a new start-up that has based its online poker platform on the relatively new technology and so far, things are looking up. A successful launch and even the chance to sponsor the Asian Poker Tour shows how much trust is being placed in this start-up. And while that trust is in part due to the reputation of its team and advisers, it’s mostly down to the transparency and security of its service.
If we are to convince the public here in Hungary that cryptocurrencies are indeed a secure method to both send and receive funds, then it’s essential that more local businesses adopt a similar strategy to CoinPoker. By adapting and learning to embrace this technology rather than fearing it, companies with a positive brand image in Hungary can instill a sense of trust and confidence in locals. And none could do this more so than the banks. If the nation’s leading financial institutions were to use blockchain-based technology and perhaps offer cryptocurrency services, it wouldn’t be too long before every company, business owner and the average person on the street would open their minds to the positive advantages of digital currencies.
So, in answer to our question on whether Hungary is ready to embrace Bitcoin, the answer is a simple not yet.
Without a doubt, cryptocurrencies have suffered a great deal in the wake of the OneCoin investigation and that there is much work to be done to restore faith in the industry. However, if Hungary wishes to encourage more foreign investment and overseas trade, they have no choice but to restore that faith.
Photo by Eivind Pederson, CC BY