.svg)
Hungary’s central bank has announced the closure of its Student Safe project, which emerged as one of the EU’s few operational central bank digital currency (CBDC) efforts.
Magyar Nemzeti Bank (MNB), the country’s monetary authority and financial regulator, along with private sector collaborators Raffeisen Bank and SimplePay, said the “pioneering” retail CBDC project is winding down.
The Student Safe mobile app project aimed to educate the younger generation about digital finance. It also provided the central bank with critical insights into retail CBDC operations and was the first CBDC pilot project in the EU to be made available to retail users.
According to the app’s website, it will be discontinued on February 3, 2025, and user accounts will only be available until this date. The project has said it is no longer accepting new registrations for the service as of December 2, 2024.
“As a free and secure financial mobile app, Student Safe helped primary school-age children to familiarise themselves with real money, digital payments and savings in a modern digital environment and under parental supervision, while at the same time also developing the financial awareness of the young generation in a playful way,” the MNB said in a press statement.
Learning about CBDCs
The app’s design allowed the MNB to test all facets of a potential retail CBDC system, from issuance and redemption to fraud prevention and customer relationship management, which are tasks traditionally outside the central bank's purview.
The central bank said that the mobile app enabled it to “gain hands-on experience of a possible way to develop and operate a retail CBDC system, in real-life conditions, involving a focused user community and taking customer needs fully into account.”
During its period of operation, the Student Safe programme met the objectives set by the central bank, which said the “achievements and lessons learned” will live on.
“The experience and competences gained during the pilot project will not only be useful for the MNB’s future digital developments, but will also serve as a valuable example for the international central banking community, shaping the future of money,” the MNB said.
Over the course of the 18-month project, Student Safe saw widespread international success. It won the CBDC Initiative Award for 2024 from London-based Central Banking Publications, as well as the Financial Solution of the Year for Young People award at Mastercard’s Bank of the Year competition in 2023.
A blueprint for the EU?
The European Central Bank (ECB) may begin to consider pilot work for its digital euro in 2025, and would perhaps do well to consider the progress made by Hungary, which is not a Eurosystem member but is a member of the EU.
The Student Safe pilot provided practical experience in designing, deploying, and managing a retail CBDC, and allowed the MNB to test and refine operations in a controlled but realistic setting.
The app also helped foster financial literacy among primary school-aged children and their families.
By teaching digital payments and savings through an engaging platform, it built financial awareness from an early age, and the initiative demonstrated how central banks can effectively engage communities and build trust in digital financial tools.
Collaboration with fintechs and commercial banks was another key success of the project.
The model had room for innovation without disrupting existing business objectives, and highlighted the potential for public-private collaboration in the development and deployment of digital financial solutions.
These are things that the ECB would no doubt like to achieve with its expensive digital euro project, which has so far failed to generate enthusiasm among market participants.
“Engagement with external stakeholders, ranging from policymakers and market participants to the general public, is a key priority,” the second progress report on the digital euro says, and the MNB’s approach could serve as a blueprint for reaching out to underserved communities.
The challenges
Piloting a retail CBDC at scale in a larger, more Westernised economy presents significant operational and technological risks.
Robust infrastructure is essential to prevent system failures, including outages and technical glitches, which could erode public trust.
Scaling from smaller initiatives, such as Hungary’s Student Safe pilot, to a broader population may also reveal performance and reliability challenges not encountered in more controlled environments.
A routine issue with wider EU retail payments progress is the need to appeal to both digital payments-focused consumers, such as those in the Netherlands, and individuals in more cash-inclined nations, such as Germany and Austria.
A pilot like Student Safe may not be able to operate horizontally across the EU — it could work better if applied either depending on attitudes in the country or through national central banks such as the Banque de France or the Bundesbank.
Public perception and trust are equally critical. A large-scale pilot could face resistance from citizens concerned about privacy and the potential for government surveillance, particularly if the system is perceived as intrusive.
Lack of public understanding of the pilot's goals and benefits could further limit adoption, undermining its effectiveness and jeopardising trust in the broader CBDC initiative.
