Hungary is currently considering the potential benefits of launching a central bank digital currency (CBDC) in order to reach unbanked citizens, according to a high-ranking official’s statement.
Despite being a European Union (EU) member state and therefore required to adopt the euro, Hungary has shown no urgency in setting a specific timeline to replace its national currency, the forint.
Various European authorities, including the central banks overseeing the pound, euro, and Swedish krona, are actively investigating the possibility of issuing digital versions of their respective currencies.
As of the beginning of 2023, over 114 countries were exploring CBDC projects. The most notable ones include the digital yuan, dollar, and euro. However, other countries have also made significant progress with their CBDC projects.
For instance, Thailand’s central bank partnered with SCG to conduct a pilot test for its CBDC, while South Korea introduced a pilot program for its planned CBDC project and later set up a legal advisory committee to check any regulatory hurdles.
With so many countries exploring CBDC projects, it is clear that this technology is gaining traction worldwide.
Anikó Szombati, the chief digital officer of the Hungarian Central Bank, stated at an official monetary and financial institutions forum event that there is no immediate need for the widespread adoption of a retail CBDC by ordinary citizens and merchants.
However, she also mentioned that the Hungarian Central Bank is conducting a series of pilot projects to explore the potential of issuing a CBDC, with the aim of staying at the forefront of CBDC research.
According to research conducted by the Bank for International Settlements (BIS), approximately 90% of central banks worldwide are examining the possibility of implementing a CBDC.
Szombati noted that when contemplating the introduction of a CBDC, the primary motivation should stem from a significant market failure or a robust policy objective.
She suggested that one possible incentive for Hungary could be to increase financial inclusion, as around 13% of Hungarian adults currently do not have access to bank accounts.