The central bank of Nepal reminded citizens that trading and mining cryptocurrencies is illegal in the country. The regulator also warned the people of the Himalayan nation that participating in these activities would lead to penalties according to the current legislation. However, media reports reveal that despite this position, Nepalese have been continuously investing in Bitcoin. The Nepal Rastra Bank (NRB) issued a warning recently that was titled ‘Cryptocurrency transactions are illegal’. The notice appeared on the website of the central bank on Thursday and the financial regulator referred to the Foreign Exchange Act in the country that had been adopted in 2019.
The NRB said in the notice that crypto mining and trading are leading to illegal activities, which is punishable in accordance with the existing laws. Similarly, the monetary authority added that people who were swindling others via these illegal activities would also be subjected to action. This warning is aimed at Nepalese citizens who encourage others to use a crypto exchange or mine cryptocurrencies. The FAQ section of the central bank’s website has a question, which is ‘Is it possible to trade cryptocurrencies including Bitcoin in Nepal?’ In response to this question, the monetary authority has said that crypto including Bitcoin cannot be traded in the country and doing so is illegal.
Under the NRB Act, cryptocurrencies are banned in the country. Previously, there have been reports regarding the government of Kathmandu cracking down on these activities, and people involved in trading and mining have also been arrested. Regardless, bitcoin has still attracted a lot of attention from the population in the country and articles found in the media have responded to this increasing interest. Despite the warnings of the NRB, the Nepalese have not backed down and continue to invest in cryptocurrencies.
The people have been impacted by the successful examples of people who invested their money in bitcoin. According to the country’s media, cryptocurrencies can become the future currency in the world due to which people are transacting in bitcoin. There are several ways through which the Nepalese people are investing, such as taking the help of friends and relatives living abroad for doing so. Such investments mostly remain unnoticed because Nepal is far behind in technological advancements, which means that the central bank cannot track and regulate most online transactions.
Some people are of the opinion that while immediate legalization of cryptocurrencies in the country is impossible, the authorities in Kathmandu shouldn’t underestimate the rapidly increasing use of these digital currencies in businesses globally. Since these do not involve third parties, crypto transactions are fast, cheap, and secure. Therefore, Nepal should look into changing its perception regarding bitcoin and crypto legislation when it comes to the policy level. Many other countries have already done so, as Ukraine and Cuba have already introduced laws for legalizing cryptocurrencies. In fact, El Salvador has gone as far as introducing bitcoin as legal tender in the country. Likewise, other countries are also pondering their own moves.