The Central Bank of Hungary is reviewing its international foreign exchange reserve strategy and excluding the possibility of adding cryptocurrency assets to its portfolio.
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The Central Bank of Hungary is reassessing its foreign exchange reserve strategy.
This viewpoint reflects the caution of traditional financial institutions towards cryptocurrencies.
What is the Central Bank of Hungary's plan for foreign exchange reserve strategy?
Finance expert Kuraly stated that the Central Bank of Hungary is in the process of reassessing its international foreign exchange reserve strategy to ensure stability and safety for the national reserve.
According to a report from Zhitong Finance on July 2, 2024, the review of this strategy focuses on selecting appropriate asset types and mitigating potential risks in the current global economic environment.
Why does the Central Bank of Hungary exclude cryptocurrencies from national reserves?
The Central Bank of Hungary is not considering adding cryptocurrency assets to its foreign exchange reserve system due to risks related to price volatility and lack of stability.
Mr. Kuraly emphasized that cryptocurrencies do not qualify as safe reserve assets, especially in the context of highly volatile digital currencies that are not yet fully regulated by global financial authorities.
Cryptocurrencies remain highly volatile and risky, making them unsuitable for national reserves, especially for central banks seeking long-term stability.
– Kuraly, Central Bank of Hungary official, 2024
What does this move reflect about the trends of central banks towards cryptocurrencies?
The cautious stance of the Central Bank of Hungary reflects the general trend of many central banks worldwide in carefully considering risks before incorporating cryptocurrencies into their foreign exchange reserve strategy.
Many financial institutions continue to prioritize traditional assets such as gold, strong foreign currencies, and government bonds due to their high stability. The IMF's 2023 report also notes that many central banks are skeptical about adopting cryptocurrencies in national foreign exchange reserves.
Stability and predictability are top factors when choosing foreign exchange reserve assets, which cryptocurrencies currently do not fully meet.
– Maria Lopez, IMF economist, 2023
What should be noted from the decision of the Central Bank of Hungary?
The decision to maintain the foreign exchange reserve strategy and not include cryptocurrencies in the portfolio reflects a cautious but scientifically grounded and practical experience in financial risk management.
This sends a clear signal that cryptocurrencies are still in a developmental stage and require more time to be recognized as stable assets in the international financial system.
Frequently Asked Questions
What is the Central Bank of Hungary considering regarding foreign exchange reserves?
The bank is reassessing its reserve strategy to optimize the safety and efficiency of its resources.Why are cryptocurrencies not included in Hungary's reserves?
Do many other central banks share Hungary's viewpoint?
Many central banks around the world are also skeptical and prioritize traditional assets over cryptocurrencies.How does the IMF view cryptocurrencies in foreign exchange reserves?
The IMF assesses that cryptocurrencies do not yet qualify as stable reserve assets due to their volatility and risks.
Source: https://tintucbitcoin.com/ngan-hang-hungary-khong-chap-nhan-tien-dien-tu/
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