Want to know about the current situation on bitcoin and cryptocurrency legislation in Nepal? Then keep on scrolling. Within a minute, you will learn about bitcoin and other cryptocurrency legislation in Nepal.
Bitcoin and other cryptocurrencies are the decentralized digital money. Cryptocurrencies are now slowly ruling over the centralized transaction system and gaining popularity around the world. Many countries have already legalized cryptocurrencies. El Salvador is the first country to adopt bitcoin as a legal tender. But, in some countries, bitcoin and cryptocurrency legislation are not very popular. Let’s have a look at the current scenario on bitcoin and cryptocurrency legislation in Nepal in detail.
Bitcoin and cryptocurrency legislation in Nepal
Bitcoin and other forms of cryptocurrencies are the new emerging currency. But, in the case of Nepal, these cryptocurrencies are considered illegal. The Nepal Rastra Bank (NRB) had stated on August 13, 2017, claiming bitcoin transaction does not follow the law of Nepal.
NRB, the central bank of Nepal under the Nepal Rastra Bank Act 2001 and foreign exchange Act, published a notice prohibiting the use of bitcoin and other cryptocurrencies. Since then, these types of currencies are not valid currencies in Nepal.
Why bitcoin and cryptocurrency banned in Nepal?
Here are some major reasons for banning bitcoin cryptocurrency in Nepal:
1. Laws of Nepal:
The Nepal Rastra Bank banned the bitcoin cryptocurrency under two laws, the NRB act of 2058 BS and the foreign exchange act of 2019 BS. According to these laws, bitcoin is not currency, and hence online transaction of bitcoin is illegal. Therefore, you cannot use bitcoin in exchange or trade.
2. Lack of regulations from the Nepal government and NRB Bank:
Nepal still lags in advanced technology to monitor digital cryptocurrency. Most of the transactions of cryptocurrencies follow a digital platform. In such a scenario, the Nepal government and NRB cannot regulate bitcoin transactions. Therefore, bitcoin and cryptocurrency legislation are not even considered.
3. Use of bitcoin in illegal activities:
In some cases, people are using bitcoin and cryptocurrencies for illegal activities. Many people use bitcoin for the conversion of black money into white. Due to lack of any authorization no control measures on such activities.
4.The threat of causing damage to the Nepali economy:
In Nepal, a considerable amount comes from tax as revenue. But, in the case of cryptocurrencies no such provision. If more Nepali use cryptocurrencies, then there will be a loss of a large amount of revenue. And can affect the whole economy of the country.
Bitcoin currency is very volatile and can have unpredictable ups and downs. The primary role of NRB is to maintain the economic stability of Nepal. On the other hand, the increasing charm of bitcoin may have increased the pressure on the bank, resulting in the banning of bitcoin and cryptocurrency in Nepal.
These are some major reasons for the annulments of bitcoin and cryptocurrency legislation in Nepal. The Nepal government is taking action strictly against bitcoin use. “Bitsewa” was the most significant bitcoin operator of Nepal, shut down due to the illegalization of bitcoin.
Knowledge of Bitcoin and cryptocurrencies legislation among Nepalese
There are more than a thousand cryptocurrencies used around the world. Among them, Bitcoin is the first cryptocurrency invented by a Japanese programmer in 2009. It has the highest value among other cryptocurrencies. Other forms are Ethereum, Ripple, Polkadot, Dogecoin, and many more.
In the case of Nepal, the only bitcoin has been heard and also used by some people. In such a case, many people think of cryptocurrency as bitcoin and vice versa. Even the NRB also seems to think that way. Due to which there is a dilemma for other forms of cryptocurrencies, whether they are legal or illegal.
How effective banning bitcoin and cryptocurrencies in Nepal?
Cryptocurrency can be the future currency in the world. Some successful example of people who invested in bitcoin has an impact on Nepalese too. So, there is a huge suspect some people are still transacting by bitcoin.
It seems that Nepalese are investing in several ways. Some reports show that people are taking help from relatives and friends living abroad to invest in cryptocurrencies. Also, they are involved in the transaction by creating a website. But, the trades are not readily apparent due to the banning of bitcoin.
So, people involved in bitcoin transactions may have been investing illegally in Nepal.
Summing all up,
Bitcoin and cryptocurrency legislation instantaneously may become impossible. But, the government cannot underestimate the increasing use of digital cryptocurrencies in business globally. As it does not involve a third party, the transaction is secure, fast, cheap, and secure. Considering these, Nepal should change the perception about bitcoin and cryptocurrency legislation on a policy level soon.