The governor of Hungary’s central bank has called for a European Union ban on cryptocurrency trading and mining. “It is undeniable that cryptocurrencies could be used to facilitate illegal activities and contribute to the formation of financial pyramids,” he said.
The Hungarian National Bank, the central bank of Hungary, published a statement Friday from György Matolcsy, the governor of the central bank, declaring that the “Time has come to ban crypto trading and mining in the EU.”
He noted that “China declared all cryptocurrency activities illegal last September” and Russia’s central bank has proposed “a ban on crypto trading and mining.”
Commenting on the Russian central bank’s crypto ban proposal, Governor Matolcsy said:
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 new bitcoin.
In January, the vice-chairman of the Board of Supervisors of the European Securities and Markets Authority (ESMA), Erik Thedéen, called for an EU-wide ban on cryptocurrency mining based on the proof-of-work concept.
The governor of the Hungarian National Bank added that the Russian central bank “is right” in saying that “The breakneck growth and market value of cryptocurrencies are defined primarily by speculative demand for future growth, which creates bubbles.”
He emphasized: “The EU should act together in order to preempt the building up of new financial pyramids and financial bubbles. EU citizens and companies would be allowed to own cryptocurrencies abroad and regulators will track their holdings.” Governor Matolcsy further opined:
It is clear-cut that cryptocurrencies could service illegal activities and tend to build up financial pyramids.
Russia’s central bank proposed in January to outlaw all cryptocurrency operations in the country. “Cryptocurrencies also have aspects of financial pyramids, because their price growth is largely supported by demand from new entrants to the market,” according to the report published by the Bank of Russia.
However, the crypto ban proposal by the central bank was met with opposition as the Russian government, parliament, and even law enforcement departments are reportedly not willing to back the proposal.
Russian President Vladimir Putin subsequently urged the government and the central bank to reach a consensus on cryptocurrency, highlighting the potential of cryptocurrency mining in Russia. Last week, the Russian government approved a plan to regulate cryptocurrency.