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Domestic policies (1018–1024)

Bishop Leodvin wrote that Stephen collected relics of a number of saints in "Cesaries" during his campaign in the Balkans, including Saint George and Saint Nicholas. He donated them to his new triple-naved basilica dedicated to the Holy Virgin in Székesfehérvár, where he also set up a cathedral chapter and his new capital. His decision was influenced by the opening, in 1018 or 1019, of a new pilgrimage route that bypassed his old capital, Esztergom. The new route connected Western Europe and the Holy Land through Hungary. Stephen often met the pilgrims, contributing to the spread of his fame throughout Europe. Abbot Odilo of Cluny, for example, wrote in a letter to Stephen that "those who have returned from the shrine of our Lord " testify to the king's passion "towards the honour of our divine religion". Stephen also established four hostels for pilgrims in Constantinople, Jerusalem, Ravenna and Rome.

all those from Italy and Gaul who wished to go to the Sepulchre of the Lord at Jerusalem abandoned the usual route, which was by sea, making their way through the country of King Stephen. He made the road safe for everyone, welcomed as brothers all he saw and gave them enormous gifts. This action led many people, nobles and commoners, to go to Jerusalem.

In addition to pilgrims, merchants often used the safe route across Hungary when travelling between Constantinople and Western Europe. Stephen's legends refer to 60 wealthy Pechenegs who travelled to Hungary, but were attacked by Hungarian border guards. The king sentenced his soldiers to death in order to demonstrate his determination to preserve internal peace. Regular minting of coinage began in Hungary in the 1020s. His silver dinars bearing the inscriptions STEPHANUS REX ("King Stephen") and REGIA CIVITAS ("royal city") were popular in contemporary Europe, as demonstrated by counterfeited copies unearthed in Sweden.

Stephen convinced some pilgrims and merchants to settle in Hungary. Gerard, a Benedictine monk who arrived in Hungary from the Republic of Venice between 1020 and 1026, initially planned to continue his journey to the Holy Land, but decided to stay in the country after his meeting with the king. Stephen also established a number of Benedictine monasteries — including the abbeys at Pécsvárad, Zalavár and Bakonybél — in this period.

The Long Life of Saint Gerard mentions Stephen's conflict with Ajtony, a chieftain in the region of the river Maros. Many historians date their clash to the end of the 1020s, although Györffy and other scholars put it at least a decade earlier. The conflict arose when Ajtony, who "had taken his power from the Greeks", according to Saint Gerard's legend, levied tax on the salt transported to Stephen on the river. The king sent a large army led by Csanád against Ajtony, who was killed in battle. His lands were transformed into a Hungarian county and the king set up a new bishopric at Csanád (Cenad, Romania), Ajtony's former capital, which was renamed after the commander of the royal army. According to the Annales Posonienses, the Venetian Gerard was consecrated as the first bishop of the new diocese in 1030.