Is bitcoin banned in Nepal?

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Ban of Transaction of Bitcoin and other cryptocurrencies in Nepal.

 

Is bitcoin banned in Nepal?

central bank of NepalNepal Rastra Bank (“NRB”) published a notice pursuant to Nepal Rastra Bank Act 2001 (“NRB Act”) and Exchange (Regulation) Act 1962 (“FERA”) prohibiting the usage of Bitcoin in Nepal. NRB has not recognized Bitcoins as a valid currency in Nepal.

A few highlights on the ban:

  1. Laws of Nepal: The , Nepal’s central bank, highlighted two laws in its statement banning Bitcoin and its transactions: the foreign exchange statute of 2019 BS and the Nepal Rastra Bank Act of 2058 BS. It basically means that you can’t do bitcoin transactions or use bitcoin to swap foreign or Nepali currency in Nepal because bitcoin isn’t classified as a currency by the Nepali government, therefore utilizing the internet for bitcoin transactions or exchange is unlawful.
  2. Lack of regulations: NRB and Nepal govt is unable to have proper regulation over bitcoin transactions, as it’s mostly done over internet and Nepal doesn’t yet have the technology needed to regulate it, and hence it may be banned.
  3. Use in illegal activities: Reports of bitcoin being used for or making black money into white by converting into Bitcoin, among other is another reason.
  4. Damage to Nepali economy: Bitcoin transactions unlike other transactions can’t be taxed, so be loss of revenue, plus if more Nepalis use bitcoins, the monetary system of Nepal may be affected, Bitcoin is also a very volatile currency with lots of ups and downs and long term it can cause severe problems. NRB is tasked with maintaining the financial stability of Nepal and maybe it felt, bitcoin was a threat.

These are a few of the , in my opinion, why bitcoin is prohibited in Nepal. The existing Nepali laws prohibit it, and the central bank believes that bitcoin cannot be effectively regulated, that it can be used for unlawful purposes, and that it will harm the Nepali economy in the long run. The Nepalese government has recently taken tough measures against bitcoin transactions, including arresting people who were mining bitcoin or had large amounts of bitcoin, shutting down Nepal’s largest bitcoin exchange operator and arresting its owners, and even arresting a Nepali politician from a minor party for bitcoin trading.

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