Hungary’s Minister of Finance Mihály Varga announced on Tuesday that the country’s government would halve capital gains tax on cryptocurrency earnings from 30.5 percent to 15 percent as part of their COVID-19 relief program.
Announced in a video posted on Facebook, the news will make the EU country a competitive jurisdiction concerning capital gains tax on crypto-assets. It will likely please Hungarian crypto investors set to receive a 50 percent tax cut on those earnings from 2022.
Cryptocurrencies have come a long way since Satoshi Nakamoto, the pseudonymous inventor of Bitcoin, published a white paper about a Peer to Peer Cashless system in 2008.
Nakamoto sought to design an electronic payment system that would circumvent the need for trusted third parties like banks to verify transactions.
Towards the end of 2017, the price of Bitcoin began to soar and reached almost $20,000 (€16,486), having climbed from $900 in January of that year.
In 2021, growing interest from financial institutions has helped propel the total cryptocurrency market capitalization to over $2.5trillion (€2.06 trillion) this week – an increase of almost 930 percent last year.
“There are different options from our perspective and we are considering where we can best service clients,” Itay Tuchman, Citigroup’s global head of foreign exchange, told the Financial Times on Friday.
“We shouldn’t do anything that’s not safe and sound. We will jump in when we are confident that we can build something that benefits clients and that regulators can support,” he told the newspaper.