Hungary Considers Launching Central Bank Digital Currency
The National Bank of Hungary is considering launching its central bank digital currency (CBDC). The move would be aimed at achieving either severe market failure or a strong policy objective, said Marton Szombati, deputy governor of the Central Bank of Hungary. Getting more people into the financial system could be one incentive, with 13% of Hungarian adults reportedly without bank accounts.
Central bank digital currencies are increasingly being explored by monetary authorities globally. China has arguably been the most vocal and has already begun testing its digital yuan, with Sweden, Canada, and the Bahamas also exploring the feasibility of their own CBDCs.
Some experts believe the issuance of CBDCs could help avoid some risks that come with cryptocurrencies. CBDCs can be issued by a central bank and would have the same value as a country’s physical currency, unlike cryptocurrencies that are decentralized and not backed by any government or physical asset.
The potential drawbacks of CBDCs, however, have also been discussed, with privacy and security concerns being top of mind. Critics argue the issuance of digital currencies by central banks could further increase government surveillance of financial transactions.
The Hungarian central bank has yet to make a final decision on whether to launch a CBDC, but the consideration is seen as a significant step towards a possible future rollout.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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