Hungary is dismantling a restrictive digital assets framework introduced under former Prime Minister Viktor Orbán, a sweeping policy reform that would decriminalize cryptocurrency trading and abolish prison sentences that drove major platforms out of the country, government spokeswoman Anita Kobol said Thursday. According to To Bloomberg.
The reversal represents a complete reversal of legislation that came into effect on July 1, 2025, after Parliament passed rules criminalizing the use of unlicensed exchanges and some unauthorized high-value cryptocurrency transactions.
Those transactions range between 50 million Hungarian forints (about $162,000) and 500 million forints (about $1.62 million) – subjected individuals to prison sentences of up to two or five years, depending on the value of the transaction. Service providers operating without a license from the central bank faced penalties of up to eight years.
The rules require certified verification for both crypto-to-fiat and crypto-to-crypto transfers, a burden that prompted platforms including Revolut to suspend cryptocurrency services in Hungary and sparked an EU investigation into whether the restrictions complied with bloc-wide regulations.
Domestic trade volumes declined as local companies absorbed heavy compliance costs.
Hungary’s Politically Motivated Safeguards Against Bitcoin
Zoltan Tanaks, Hungary’s Minister of Science and Technology, described the previous rules as “politically motivated” and not market safeguards and announced the government’s intention to scrap the sanctions.
The new administration plans to abolish criminal prosecution of market participants, review cybersecurity rules affecting nearly 4,000 Hungarian companies subject to the NIS2 directive, and align national law with the regulation of EU markets in cryptoassets.
Officials have identified Estonia As a model for rebuilding the digital regulatory environment in Hungary. Tanaks said the reforms should bring international platforms back to Hungary and reduce friction for local operators, according to Bloomberg.
This shift has significance beyond Hungary’s borders. The Orbán-era framework was one of the most restrictive in the EU, and the EU investigation has put Hungary at odds with the broader MiCA framework that governs cryptocurrency activity across the bloc.
Alignment with MiCA would bring Hungary into line with the regulatory standard that is now binding on all 27 member states.
Hungary’s pivot follows a broader trend of governments reconsidering punitive cryptocurrency policies. In April, the Central Bank of Pakistan Up An eight-year ban on cryptocurrency operations was imposed, as part of a broader move towards regulatory openness across emerging markets.
The convergence of these shifts suggests that unilaterally restrictive frameworks face increasing pressure as institutional adoption of digital assets accelerates globally and cross-border regulatory harmonization deepens under frameworks such as MiCA.
The Hungarian government has not yet set a timetable for the legislative changes to take effect.
