Hungarian Central Bank Governor Advocates EU Wide Crypto Ban

The Governor of the Hungarian Central Bank, György Matolcsy, recommended that all cryptocurrency-focused activities including trading and mining should be banned across the European Union.

In a release published on the Magyar Nemzeti Bank's (MNB) website, Governor Matolcy said his new stance aligns with those of the Russian Central Bank, as well as that of Erik Thedéen, the Vice-Chair of the European Securities and Markets Authority (ESMA) who said Proof-of-Work (PoW) should be banned in the EU.

“I perfectly agree with the proposal and also support the senior EU financial regulator’s point that the EU should ban the mining method used to produce most new bitcoin,” Governor Matolcy wrote adding that he believes it is “clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids.”

The Hungarian Central Bank boss said the Russian central bank was right when it said “the breakneck growth and market value of cryptocurrencies is defined primarily by speculative demand for future growth, which creates bubbles.”

Authorities around the world have often frowned at the chances of digital currencies being used for fraudulent activities, and many have moved against their proliferation through stringent regulations. While the ESMA executive cited by Governor Matolcy does not want an outright ban of cryptocurrencies as the Hungarian boss was suggesting, there is a broad agreement on tapering down the adoption of PoW mining which is generally known to be energy-intensive.

“The EU should act together in order to preempt the building up of new financial pyramids and financial bubbles," Governor Matolcy said, adding that “EU citizens and companies would be allowed to own cryptocurrencies abroad and regulators will track their holdings.”

While the Hungarian Central Bank has its own jurisdictional powers, its influence on the entire E.U might not be so strong as those of the regional powers in the bloc. However, with two prominent leaders sharing similar thoughts on banning crypto mining, the recommendations may lead to a new consideration that could make the EU move against PoW mining amongst other regulatory crackdowns.