Hungarian Team to Launch Korona Coin Cryptocurrency

Kester Eddy

Cryptocurrencies and controversy have gone hand-in-hand since the debut of Bitcoin in 2009. A cheap, easy-to-use money in the eyes of supporters; a volatile risk, if not a potential fraud, for detractors. Now Hungary is about to get its own cryptocurrency, kind of.

Korona Coin, created by a Budapest-based team, will go on sale in a European offering from March 26, but it is registered in Switzerland, and regulated by Swiss law.

If you believe Jean-Marc Stiegemeir, Korona Coin, Hungary’s soon-to-be-launched contribution to the growing array of world cryptocurrencies, will revolutionize the lives of everyone with access to a smartphone.

“I predict that over the next few years we’re going to see a revolution in how retail merchandising, as well as commercial banking, operate,” head of management Stiegemeir told the media on February 15 at a press conference announcing Korona Coin, a new cryptocurrency.

“Within ten years, cryptocurrencies are going to be widely accepted not only in-country, but on a world-wide basis... to buy retail goods, [do] business and trade currencies,” he added.

Stiegemeir, a former NASA space engineer, compares this forthcoming cryptocurrency revolution to Amazon and the online sales shake-up that has left shuttered retail stores in its wake.

Banks, which increasingly rely on ever increasing fees to boost profits, should be alert or order the shutters, he hinted, because cryptocurrencies, especially Korona Coin, are going to take away much very lucrative business.

Jean-Marc Stiegemeir (on the left) and Attila Bustya.



Music to the Ears?

While this may be music to the ears of anyone reading the bewildering list of charges on their bank statements, with Bitcoin and other cryptocurrencies available, why bother with Korona Coin?

Because the new currency, and its associated ‘eco-system, is a quantum leap in the game, asserted Tuan Trinh, a cybersecurity expert, associate professor at Corvinus Business School and adviser to the Korona project.

Bitcoin may dominate the market for now, but it is slow, expensive and energy intensive, making it unsuitable for efficient business transactions, Trinh said. To address these weaknesses, Korona Coin will create three pillars: an efficient digital payment platform, a crypto-bank allowing zero-cost currency exchange, and the korona tokens essential for the new crypto-economy.

“We have cryptocurrency 1.0 right now. We are here to build cryptocurrency 2.0,” Trinh said.

In further, detailed explanation, Attila Bustya, Korona Coin’s head of technology development, said the ecosystem would include a unique “price comparator” that would allow retail customers to buy products “at the cheapest possible price” anywhere in the world.

Business Wallet

In addition, the Korona Coin market will be an e-commerce website “presenting products from third-party websites that normally don’t accept cryptocurrency payments”, while retail businesses will use a business wallet that enables companies to register and give support for VAT reporting, invoicing and accounting; functions that are “really hard to implement” with the first generation of cryptocurrencies, Bustya said.

It sounds very impressive, although by March 7, the Korona Coin website koronacoin.io displayed a mere nine cooperating companies, including Csikisor, the Romania-based brewery at the center of a trademark row with Heineken last year.

As to whether Korona Coin in particular, or cryptocurrencies in general will leave banks closed and shuttered, the jury is still out.

“I guess a good comparison with the current mania around cryptocurrencies might be with the dot.com years of two decades ago,” János Samu, head of research at Concorde Securities, Hungary, told the Budapest Business Journal.

“Today, we can see the landscape, and only a couple of them survived. The names which are currently ruling the internet were either absent at that time, or not in the first-tier companies from that time.”

Moreover, commercial banks are themselves working on their own cryptocurrencies.

“A lot of trials have been made to overcome the bitcoin shortcomings, but none has [emerged] as a clear contender. Maybe it could be Korona Coin,” Samu said. “It is very hard to say in what form cryptocurrencies are going to survive or change the world.”

Financial Officialdom Wary of Cryptocurrency Risks

While the National Bank of Hungary (MNB), at the time of going to press, has not issued any opinion on Korona Coin, like other central banks, it has warned in the past about what it sees as the dangers and volatility risks of cryptocurrencies.

In December 2016, as reported by the BBJ, the central bank stated that “So-called cryptocurrency issuers, generally advertising on the internet with intensive marketing tools and promising yields, are trying to entice more uninformed users into the system.”

In other words, apart from the risk of systems designed to defraud from the outset, even ‘good’ cryptocurrencies are very risky. For central banks, the very essence of cryptocurrencies - part of their inherent flexibility and cost-saving characteristics - is at the same time, their potential downfall, namely, there is no “authority” i.e. central bank, ensuring proper transparency, regulation and, ultimately, able to support the currency in time of crisis.

This makes cryptocurrencies very much a matter of belief: should token holders lose faith in the new money, it will collapse. Naturally, this is true even for national currencies, except that such traditional money has a ‘home’ country (or countries) which use and need it every day, plus a central bank, regulator and government which must answer if things go wrong.

Advocates of cryptocurrencies respond that it is the very nature - indeed the responsibility - of central banks and associated established infrastructure to eye any revolutionary systems with suspicion.

Speaking as a neutral, János Samu, head of research at Concorde Securities, told the BBJ: “The MNB warnings are similar to what other central banks are saying and thinking.” Samu notes, however, that among big financial hitters, Christine Lagarde, head of the International Monetary Fund has stood out as an exception to the rule.

“Christine Lagarde has been the most positive official, more broadly about fintech, and within that, perhaps even the cryptocurrencies have been mentioned by her a couple of times. I think the IMF is pretty much keen on it,” Samu said.