Stablecoin issuer / redeemer in Hungary

Electronic Money Tokens (EMTs): These are crypto-assets that purport to maintain a stable value by referencing the value of one official currency (e.g., a token pegged 1:1 to the Euro).

Regulatory Treatment: EMTs are largely regulated as electronic money under MiCA, which builds upon the existing Electronic Money Directive (EMD2) (Directive 2009/110/EC) but with additional specific requirements for crypto-assets.

Issuers must hold 1:1 backing for all outstanding EMTs in highly liquid, low-risk assets denominated in the referenced fiat currency.

These reserve assets must be segregated from the issuer's own operational funds.

A significant portion of the reserve assets must be deposited at credit institutions (banks).

Issuers must have a clear redemption policy and provide transparency on the composition of the reserve assets.

Must either be a credit institution (bank) or an electronic money institution (EMI) authorised under EMD2 (and thus under Hungary's Act CCXXXV of 2013) that also obtains an additional MiCA authorization.

The MNB will be the competent authority for authorising Hungarian entities.

For EMTs: Holders have a direct contractual claim against the issuer and have the right to redeem the token at par value from the issuer at any time.

For ARTs: Holders also have a direct claim against the issuer and the right to redeem their ARTs at market value (based on the referenced assets). The issuer must establish and disclose clear redemption policies.

Algorithmic stablecoins that do not maintain stability through collateral (but rather through an algorithm that aims to maintain a stable value, often by burning/minting tokens) are effectively prohibited from being issued in the EU.

Issuers of ARTs: Must be a legal entity established in the EU and obtain authorization from their national competent authority (the MNB in Hungary). This authorization process involves detailed requirements regarding governance, capital, operational resilience, and business plans.

MiCA Regulation (EU) 2023/1114: Articles 16-20 (ARTs), Articles 48-52 (EMTs).

VASP Registration: Under the transposition of the EU's 5th and 6th Anti-Money Laundering Directives (AMLD5/AMLD6), custodial wallet providers are classified as Virtual Asset Service Providers (VASPs).

Obligation: VASPs, including those offering custodial services, are required to register with, or be licensed by, the Hungarian Financial Supervisory Authority (primarily the Magyar Nemzeti Bank - MNB, the Central Bank of Hungary, which oversees financial market supervision) for AML/CTF purposes.

Act CXXXVI of 2013 on the prevention and combating of money laundering and terrorist financing (Pmtv.) – This is Hungary's primary AML law, amended to include virtual asset service providers.

Authorization as a CASP: Under MiCA, any entity providing "custody and administration of crypto-assets on behalf of third parties" will be classified as a Crypto-Asset Service Provider (CASP) and will require prior authorization by a national competent authority (in Hungary, this will be the MNB).

Explicit Mandate: MiCA explicitly requires CASPs providing custody services to make adequate arrangements to safeguard the ownership rights of clients, particularly in the event of the CASP's insolvency.

Key Requirements (Article 67):

Keep client crypto-assets and funds separate from their own crypto-assets and funds.

Maintain records and accounts that allow for the immediate segregation of client crypto-assets and funds from own assets and from those of other clients.

Return client crypto-assets and funds without undue delay upon their request.

Corporate Income Tax (CIT): Profits derived from virtual asset activities are subject to the standard 9% Corporate Income Tax (CIT).