A significant shift could be on the horizon for Hungary’s cryptocurrency market after the new Magyar government submitted legislation to Parliament that would ease controversial rules introduced last year.
Government to overhaul crypto rules
According to the proposal published on Parliament’s website, the overarching aim remains to ensure that crypto services operate in a secure, transparent and traceable manner. However, the cabinet now argues that maintaining the so-called validation requirement is no longer necessary, the Hungarian news agency wrote.
The explanatory memorandum states that the validation regime has become a competition-restricting obligation within the crypto services market, one that is unsustainable in the long term and should therefore be phased out of Hungarian regulation.
The validation requirement, introduced last year, mandated that the conversion of cryptoassets be subject to compliance certification by a separately licensed validation provider. The rule drew sharp criticism from industry players, who argued that it imposed significant administrative burdens while, for a considerable period, no functioning system existed to make compliance feasible in practice. As a result, several international providers scaled back their operations in Hungary, and the European Commission launched infringement proceedings against the country.
Predictability and consumer protection
The newly tabled amendment is expected to bring Hungary’s regulatory framework closer into line with the European Union’s Markets in Crypto-Assets (MiCA) regulation, which establishes a unified regime for cryptoassets across member states. The system is designed to strengthen consumer protection while providing service providers with a predictable operating environment.
Should Parliament adopt the proposal, Hungary’s crypto market could become markedly easier to navigate, while oversight would continue to be ensured under rules aligned with EU standards, preserving market transparency.
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EU-wide rules take effect
The Hungarian move comes at a moment of sweeping change across Europe’s crypto sector. As of 1 July, the EU’s MiCA regulation has fully entered into force, introducing a single licensing regime for cryptoasset service providers, Portfólió wrote.
The new framework is already reshaping the market dramatically. According to the European Securities and Markets Authority (ESMA), only 244 providers currently hold an EU licence. Data from VASPnet suggests that as many as 1,738 firms are being pushed out of the European market after failing to secure authorisation in time. In effect, only around 12 per cent of previously active companies will be able to continue operating unchanged.
Major licensed players, including Coinbase, Kraken and OKX, have already begun absorbing the clients of exiting competitors. The most notable laggard, however, is Binance, with several services for its EU customers suspended until it obtains the necessary MiCA licence. ESMA has also warned unlicensed firms to cease onboarding new clients immediately, with existing customers likely limited to withdrawing their cryptoassets or transferring them to authorised providers.
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