The current state of crypto-assets regulation in Hungary

/in /by
  1. Act VII of 2024 and MiCA

The regulation of cryptocurrencies and crypto-assets in Hungary is continuously evolving to align with EU legislation and technological advancements. Hungary’s legal framework is anchored in Act VII of 2024 on the Crypto-Assets Market, which provides comprehensive regulations regarding the issuance of certain crypto-assets and the provision of related services. Moreover, the European Union’s regulation of crypto-assets is governed by the MiCA Regulation (Markets in Crypto-Assets; REGULATION (EU) No 2023/1114 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010, as well as Directives 2013/36/EU and (EU) 2019/1937).

The Hungarian Crypto Act is fundamentally grounded in the MiCA Regulation and stipulates the obligation to apply it through a separate legislative act, while also detailing the supervisory rules governing crypto-assets.

While the MiCA Regulation applies to individuals involved in the issuance, public offering, and admission to trading of crypto-assets, or those providing services connected to crypto-assets within the European Union, the scope of the Hungarian Crypto Act covers the issuance of crypto-assets in Hungary, their public offering or admission to trading, crypto-asset services conducted within Hungary, as well as the supervisory activities carried out by MNB (Hungarian National Bank).

The Hungarian Crypto Act and the MiCA aim to establish uniform rules for, among other matters, the issuance of certain crypto-assets, the public offerings of crypto-assets and the admission of crypto-assets to a crypto-asset trading platform, as well as certain related services. The MiCA furthermore aims to ensure investor protection and imposes transparency and reporting obligations on market participants.

  1. Anti-money laundering rules

The Hungarian Act on the Prevention and Combating of Money Laundering and Terrorist Financing (Pmt.) continues to play a pivotal role in crypto-asset-related activities in Hungary. Crypto-asset providers must adhere to strict anti-money laundering regulations, conduct thorough customer identification, and report any suspicious transactions.

  1. Role of the MNB and licensing guidelines

MNB (National Bank of Hungary) is responsible for supervising the entities, persons and activities subject to the Crypto-Assets Market Act. MNB issues guidelines for crypto-asset issuers and crypto-asset service providers, providing clear guidance on the authorization process and compliance requirements. MNB has issued guidelines in the following areas, with further expansion anticipated:

  1. Notification of asset-backed token by a credit institution
  2. Notification of asset-backed token issuance
  3. Notification of public offering or admission to trading of e-money tokens

During the authorization and notification process, MNB pays particular attention to preserving financial stability and ensuring that investors are adequately protected.

However, according to MNB’s current Rules of Organization and Operation, no separate department has been set up to perform tasks related to crypto-assets.

  1. Tax aspects of crypto regulation

The tax implications of crypto-assets in Hungary are favorable for individuals and companies engaged in crypto-asset trading.

  1. Taxation of natural persons

Under the 2022 amendments, profits earned by individuals from trading crypto-assets are subject to a 15% personal income tax (PIT). The tax base is calculated by aggregating the profits and losses from all transactions conducted during the tax year, with related costs — such as the purchase price of the crypto-assets or mining expenses — taken into account. This simplified tax form makes the use of cryptocurrencies more favorable for individual investors.

  1. Taxation of companies

For companies, profits from crypto-asset transactions are subject to corporate tax (TAO), which is 9% in Hungary. This makes the country particularly competitive for cryptocurrency-based businesses, as it offers one of the lowest corporate tax rates in the EU.

  1. Why should you apply for a crypto license / issuance in Hungary?

Hungary offers numerous advantages for the issuance of crypto-assets and related services:

  1. Favorable tax conditions: the 15% personal income tax and 9% corporate tax are particularly attractive for both individuals and companies. This makes Hungary one of the most favorable tax environments in the EU.
  2. A strong legal framework and EU-compliant regulation: the stable legal framework provided by Act VII of 2024 on the Crypto-Assets Market, and the MiCA Regulation, along with the detailed guidelines of the MNB, create a secure and transparent operating environment for market participants. Consistency with the EU regulations ensures that crypto-asset service providers operating in the Hungarian market can compete at EU level.
  3. Supporting innovation and fintech development: the MNB supports fintech companies and innovation, fostering the spread and advancement of technologies related to crypto-assets. The transparency and flexibility of the authorization process allows crypto-asset providers to operate on a legally secure basis.

Hungary could therefore be an ideal location for the issuance and licensing of crypto-assets, as it offers competitive tax environment and EU-compliant regulatory framework for market participants.