Central Bank of Nepal -Rastra Bank (NRB)

Central Bank warns cryptocurrency trading, mining are illegal and punishable

*The Nepal Rastra Bank (NRB) maintains that its latest notice is targeting Nepalese who entice other investors to engage in coin minting or cryptocurrency exchange in the Himalayan country

Isola Moses | ConsumerConnect

As a reminder to investors in particular and the entire citizenry in general, the Central Bank of Nepal has warned that mining and trading of cryptocurrencies are illegal in the Himalayan country.

The banking regulator in the country also warned that participating in such activities would entail penalties as per the current legislation.

ConsumerConnect gathered though Nepal Rastra Bank (NRB) expressly stated this development in a recently published warning titled, “Cryptocurrency Transactions Are Illegal”, that engaging in prohibited crypto activities is punishable by law, the Nepalese have continued to invest in bitcoin, according to report.

The Central Bank stressed that cryptocurrency trading and mining are punishable as they are illegal in the country.

In the notice, which appeared on the NRB’s Web site Thursday, September 9, 2021, the financial regulator refers to Nepal’s Foreign Exchange Act, which was adopted in 2019. Quoting the warning, Khabarhub news online, reported the NRB stated: “Cryptocurrency trading and mining and encouraging the illegal activities is punishable as per existing laws.

“Likewise, those swindling people through these illegal activities are subject to action,” the monetary authority further emphasised.

“The warning is targeting Nepalese who entice others to engage in coin minting or cryptocurrency exchange.

In NRB’s answering the question, “Is it possible to trade cryptocurrencies including Bitcoin in Nepal?” in the FAQ section of its Web site, the central banking institution anwers: “Cryptocurrencies including Bitcoin cannot be traded in Nepal. Doing such business is illegal.”

Nepalese media urges government to change its crypto policy

As cryptocurrencies are banned in Nepal, also under the NRB Act, meanwhile there have been reports in the past of the government in Kathmandu cracking down on related activities and even arresting people involved in mining and trading.

Nonetheless, agency report indicates that bitcoin has continued to attract attention from the country’s population and articles by local media have responded to that interest.

Despite NRB’s warnings, the Nepalese have continued to invest in cryptocurrencies, according to local media.

Some successful examples of people who put money into bitcoin have had an impact on the Nepalese, ‘Nepali Trends’ noted in a piece devoted to cryptocurrencies this past July, elaborating: “Cryptocurrency can be the future currency in the world… 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,” the publication reported.

Such investments, report stated, remain largely unnoticed as Nepal lags behind in technological advancements and the country’s Central Bank is unable to track and regulate bitcoin transactions.

The author of the piece says he believes instant legalisation of cryptocurrencies may be impossible, but thinks Kathmandu authorities cannot underestimate the increasing use of digital cryptocurrencies in business globally.

Khadka added: “As it does not involve a third party, the transaction is secure, fast, and cheap.

“Nepal should change the perception about bitcoin and cryptocurrency legislation on a policy level soon.”

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