Hungary

Disclaimer: The regulatory information provided below is for general informational purposes only and may not reflect the most current legal developments. Cryptocurrency regulations are rapidly evolving and can change frequently. This information should not be considered legal or tax advice. Before making any business or investment decisions, please consult with qualified legal, tax, or financial professionals familiar with your specific jurisdiction and circumstances. Always verify current regulations with official government sources and regulatory bodies.

Legal Classification & Regulatory Framework

Cryptocurrency Status

Hungary does not recognize cryptocurrencies as legal tender. Under the Hungarian legal framework, crypto-assets are classified as digital representations of value or rights that can be electronically transferred and stored using distributed ledger technology. The country’s primary regulatory foundation is Act VII of 2024 on the Markets in Crypto-Assets, which implements the European Union’s Markets in Crypto-Assets Regulation (MiCA) into Hungarian law.

The Hungarian framework categorizes crypto-assets into three main types in alignment with MiCA: electronic money tokens (crypto-assets maintaining stable value by referencing a legal currency), asset-referenced tokens (crypto-assets maintaining value by referencing other values or combinations thereof), and other crypto-assets. Holding Bitcoin and other cryptocurrencies remains legal in Hungary, though the regulatory environment for trading and exchanging these assets has become notably strict.

Hungary has implemented a unique validation system that goes beyond standard EU requirements. Exchanging crypto-assets for fiat currency or other crypto-assets requires a compliance certificate issued by a crypto-asset conversion validation service provider authorized by the Supervisory Authority of Regulated Activities (SARA). Transactions conducted without this validation are considered legally invalid and may constitute criminal offenses.

Tax Treatment

Hungary offers a relatively favorable tax environment for cryptocurrency transactions. Individual investors are subject to a flat personal income tax rate of 15% on profits derived from crypto-asset transactions, with no additional social security contributions required. This simplified tax structure, introduced through amendments to the Act on Personal Income Tax, makes Hungary one of the more attractive EU jurisdictions for individual crypto investors.

The taxation model follows a “black box” approach, meaning tax liability only arises when crypto-assets are converted into fiat currency, used to purchase goods or services, or used to acquire real estate. Exchanges of one crypto-asset for another do not trigger a taxable event. The tax base is calculated by aggregating all profits and losses from transactions during the tax year, with documented acquisition costs, transaction fees, commissions, and mining expenses being deductible.

For corporate entities, profits from crypto-asset transactions are subject to Hungary’s corporate income tax rate of 9%, which ranks among the lowest in the European Union and OECD countries. Companies treat cryptocurrencies as purchased receivables within current assets under Hungarian accounting standards. Crypto-to-crypto transactions are not considered realization events for corporate tax purposes, and no liability arises until assets are converted to fiat currency.

Loss offsetting provisions allow individuals to carry forward losses from crypto transactions to offset against gains in the current tax year and the subsequent two tax years. Proper documentation and record-keeping of all transactions are essential for compliance with Hungarian tax regulations.

Regulatory Oversight

Hungary’s cryptocurrency regulatory landscape involves multiple authorities with distinct responsibilities. The Central Bank of Hungary (Magyar Nemzeti Bank, or MNB) serves as the primary competent authority under MiCA, responsible for licensing and supervising crypto-asset service providers, overseeing e-money token issuers, and ensuring compliance with financial regulations. The MNB possesses extensive supervisory powers, including the authority to issue warnings, impose fines, suspend or prohibit activities, and restrict online content when violations occur.

The Supervisory Authority of Regulated Activities (SARA, known as SZTFH in Hungarian) oversees the newly established crypto-asset conversion validation service providers. SARA authorizes entities that issue the mandatory compliance certificates required for crypto exchanges and ensures these validators conduct proper due diligence procedures, including examining asset origins, verifying wallet ownership, and conducting user profile assessments.

The National Tax and Customs Administration (NAV) handles tax compliance matters and operates the financial intelligence unit responsible for anti-money laundering registry procedures for crypto exchanges and custodian wallet providers. Compliance with Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing is mandatory for all crypto-related service providers.

Crypto-asset service providers must implement comprehensive AML/CFT policies, conduct customer due diligence and KYC procedures for new business relationships, screen customers against sanctions and PEP lists, maintain transaction monitoring systems, and file suspicious activity reports when necessary.

Business Environment

Banking Relationships

Hungary’s traditional banking sector has shown varying degrees of engagement with the cryptocurrency industry. Under Act VII of 2024, licensed financial institutions including credit institutions, investment firms, payment service providers, and fund managers can extend their activities to include crypto-asset services, provided they comply with MiCA requirements and obtain appropriate authorization from the MNB.

The relationship between crypto businesses and traditional banks in Hungary has been affected by the strict regulatory environment introduced in mid-2025. Some international fintech platforms and crypto exchanges have suspended or limited their services for Hungarian customers due to the unique validation requirements that exceed standard EU regulations. This has created challenges for Hungarian crypto holders seeking to access their assets through familiar platforms.

Notable developments include Wise becoming the first fintech in the EU to obtain an MNB settlement account, allowing participation in Hungary’s instant payments system without an intermediary bank. This marked a significant shift in financial infrastructure accessibility. However, other major platforms have taken more cautious approaches, with some pausing trading services while maintaining deposit and withdrawal capabilities.

Licensing Requirements

Operating as a crypto-asset service provider in Hungary requires compliance with both EU-level MiCA regulations and additional Hungarian requirements. Service providers that were active before the MiCA regulation took full effect were granted a transitional “grandfathering” period to adapt their operations and obtain proper licensing from competent EU authorities.

Hungary’s unique validation system introduces additional requirements beyond MiCA. Crypto-asset conversion validation service providers must obtain authorization from SARA and meet stringent organizational, prudential, and compliance standards. These include incorporation as a legal entity with appropriate governance structures, appointment of a permanent auditor, minimum registered capital requirements, qualified personnel with relevant degrees in economics, law enforcement, IT, or law, certified information security management systems, and secure communications infrastructure.

The regulatory framework includes significant criminal penalties for non-compliance. Individuals using unauthorized crypto exchange services face imprisonment of up to two years for transactions of significant value, with penalties increasing to five years for larger transactions and up to eight years for the highest value exchanges. Service providers operating without proper authorization face even more severe penalties.

Exemptions exist for certain transactions, including conversions without consideration, those not conducted on a regular basis, transactions by authorized authorities for intelligence purposes, and exchanges where natural persons swap their own crypto-assets for other crypto-assets without involving fiat currency.

Innovation Support

Despite the strict regulatory approach to crypto trading, Hungary has demonstrated commitment to financial technology innovation. The MNB established an Innovation Hub in 2018, serving as an information repository, communication platform for the fintech ecosystem, and regulatory support mechanism for innovators. The platform provides guidance on regulatory requirements and facilitates dialogue between fintech companies, traditional financial institutions, and regulators.

A regulatory sandbox initiative allows innovative financial services to be tested in a controlled environment. This framework enables collaboration between startups and regulated entities, with participants potentially receiving regulatory waivers for defined periods to test new products and services.

The MNB has pioneered a retail Central Bank Digital Currency (CBDC) pilot project, one of the first such initiatives in the EU. The pilot focuses on financial inclusion, initially targeting primary school students and families, and runs on centralized infrastructure developed by the central bank. The initiative reflects Hungary’s proactive approach to exploring digital currency innovation while maintaining regulatory control.

Hungary’s fintech sector has shown significant growth, with the number of companies operating in the country doubling over recent years. The ecosystem includes companies specializing in blockchain solutions, digital payments, data analytics, and business intelligence. Most Hungarian fintechs operate in the B2B space, providing services to banks, insurance companies, and other financial institutions rather than competing directly with them.

Market Characteristics

Adoption Patterns

Cryptocurrency adoption in Hungary has grown steadily, with estimates suggesting several hundred thousand Hungarians hold digital assets. Surveys indicate that a notable percentage of Hungarian internet users have owned or used cryptocurrency in some form. The primary adopters tend to be young professionals between ages 20 and 40, particularly those working in IT, finance, or digital freelance services.

This demographic views cryptocurrency not merely as an investment vehicle but as an alternative to traditional banking and a means of participating in the broader Web3 economy. Factors driving adoption include concerns about inflation, global economic uncertainty, and interest in preserving value through assets like Bitcoin and stablecoins. Decentralized finance protocols have also attracted interest among more technically sophisticated users.

The strict regulatory environment introduced in mid-2025 has created challenges for the local crypto community. With some major platforms suspending services and the validation framework still being clarified, Hungarian crypto holders face a more complex landscape for managing and trading their digital assets compared to users in other EU member states.

Industry Focus

Hungary’s cryptocurrency and blockchain industry has developed with particular strengths in certain areas. The country hosts fintech companies specializing in fraud prevention and security solutions for banking, crypto trading, and e-commerce applications. Digital payment services, lending platforms, and business intelligence solutions represent significant segments of the local fintech ecosystem.

B2B blockchain solutions form a notable component of Hungary’s crypto-related industry, with companies providing distributed ledger technology implementations for banks and financial institutions seeking to optimize internal processes. Budapest has emerged as a hub for startup activity, including blockchain-related ventures, benefiting from the city’s established technology and entrepreneurship culture.

The competitive corporate tax rate of 9% has attracted businesses considering Hungary as a base for cryptocurrency-related operations, though the recent regulatory developments have raised questions about the country’s attractiveness relative to other EU jurisdictions with more permissive frameworks.

Regulatory Evolution

Hungary’s approach to cryptocurrency regulation has evolved significantly over the years. Initial regulatory engagement came through the 2017 AML Act, which brought certain crypto service providers under anti-money laundering oversight. The landscape shifted substantially with the adoption of MiCA-implementing legislation in 2024, followed by the introduction of additional validation requirements and criminal penalties in 2025.

The current Hungarian framework represents one of the strictest approaches to crypto regulation within the European Union. While other EU member states have used MiCA’s transitional provisions to allow existing service providers time to adapt, Hungary’s immediate criminalization of non-compliant activities has created a more challenging compliance environment. This approach has drawn criticism from industry participants who argue it may encourage capital flight and business relocation to more crypto-friendly EU jurisdictions.

The regulatory framework continues to develop, with SARA issuing detailed rules on authorization and registration for validation service providers. As the regime matures and authorized validators become operational, the practical implications for Hungarian crypto users and businesses should become clearer. Market participants are advised to monitor official government sources and regulatory announcements for the latest developments.

Hungary’s position within the EU means that broader European regulatory developments, including full MiCA implementation across member states and potential future amendments to the framework, will continue to influence the local regulatory environment. The Digital Operational Resilience Act (DORA) and NIS2 directive also impose cybersecurity and incident reporting requirements on crypto-asset service providers operating in Hungary.

For Current Information:

• Magyar Nemzeti Bank (Central Bank of Hungary) – https://www.mnb.hu/en
• MNB Innovation Hub – https://www.mnb.hu/en/innovation-hub
• National Tax and Customs Administration (NAV) – https://nav.gov.hu/en
• Supervisory Authority of Regulated Activities (SZTFH/SARA) – https://sztfh.hu
• Hungarian National Legislation Database – https://njt.hu