Hungary to Decriminalize Crypto, Drop Prison Sentences for Transactions

The practical effect for traders and exchanges operating in Hungary is significant. Under the current rules, a Hungarian resident who bought bitcoin on a foreign exchange without using a government-approved local intermediary could theoretically face prosecution. The decriminalization removes that risk, though tax treatment and anti-money-laundering reporting requirements will still apply. Kobol said the government plans to align those rules with MiCA standards.

Hungary's crypto policy shift comes as the European Securities and Markets Authority (ESMA) begins enforcing MiCA's stablecoin rules and prepares for the broader licensing regime that takes full effect in 2026. The Orbán government had previously resisted EU-level crypto harmonization, arguing that national security concerns justified the strict approach. The reversal suggests Budapest now sees the EU framework as workable and the cost of maintaining an outlier policy as too high.

For exchanges and wallet providers, the change opens a market that had been effectively closed. Several major platforms had restricted access to Hungarian users or required them to use local intermediaries to avoid legal exposure. Those restrictions are likely to ease once the legislation passes. The Hungarian central bank, which had opposed the original criminalization, is expected to take on the role of crypto regulator under the new system, Kobol said.

The legislative process will require a vote in Hungary's parliament, where Orbán's Fidesz party holds a supermajority. Kobol said the government expects the bill to pass without significant opposition.