Money & Finance
Nepal Rastra Bank (NRB) has reiterated that the trading and mining of cryptocurrency is illegal in the country.
The central bank has urged Nepalis both at home and abroad, business firms and companies to not be involved in cryptocurrency, hyper-fund and pyramid-based network marketing transactions.
NRB’s statement has said that the digital currency has no legal tender in Nepal and there is no security. “Virtual Currency/Cryptocurrency (including Stablecoins) has not received legal recognition as a foreign exchange or currency in Nepal,” according to the statement.
It further went on to say that anyone found “using, subscribing, investing, taking ownership, transferring, remittance, exchanging, mining or other related actions” will be prosecuted according to the laws.
The 2019 Foreign Exchange Regulation Act officially declared Bitcoin and other cryptocurrencies as illegal financial tenders.
To date, the central bank has issued three notices regarding the illegality of cryptocurrency with the first one appearing on August 13, 2017. In them, NRB said that these digital currencies can lead to “defrauding” and “illegal capital outflow”. It also extended the ban to all foreigners currently living in Nepal, including tourists and visitors.
After the first public notice, the Central Bureau of Investigation arrested two individuals for operating a Bitcoin racket in Kathmandu and Pokhara.
What is cryptocurrency, anyway?
Cryptocurrency is a digital currency – essentially computer data that exists outside of the traditional currency system. They are not regulated or controlled by government bodies or regulatory banking institutions, as there are no physical notes or coins. Cryptocurrencies are held in digital wallets.
While the first cryptocurrency was created in 1990, it took off the ground when Bitcoin was introduced in 2008 by an anonymous group/person called Satoshi Nakamoto. Currently, there are more than 7,000 cryptocurrencies, such as Ripple, Ethereum, Dash, and Zcash. The difference between one cryptocurrency to the other is that they have varied algorithms and coding. Apart from that, they use the same blockchain technology and are based on the same decentralized system.
Cryptocurrency is traded through blockchain, which is a digital ledger that stores the record of crypto transactions in a digital format. The advantage of this system is that it maintains security and eliminates the need for a third party.
How can one obtain cryptocurrency? Trade for traditional currency, barter for services or mine them.
