NRB cautions against using cryptocurrency for illicit transactions

KATHMANDU: The Nepal Rastra Bank (NRB) has declared that investments in cryptocurrencies, pyramid-based network marketing, and hyper funds are prohibited.

According to NRB, such investments are not legally recognized in Nepal, and neither guarantees from the government nor any kind of protection have been given by the bank.

Such transactions are prohibited by the Foreign Exchange (Regulation) Act of 2019 and the Prohibition of Foreign Investment Act of 2021, according to a notice the central bank issued on Monday.

Virtual currency/crypto currency (coin), non-fungible tokens, and decentralized finance as foreign exchange or currency in Nepal have not received legal recognition, according to NRB.

Aside from that, the central bank has noted that such transactions carry risks related to speculative activities, fraud, tax evasion, investment insecurity, capital flight, price instability, and fluctuations.

The central bank further stated that pyramid-based network marketing and hyper funds carry inherent risks of fraud, tax evasion, investment insecurity, capital flight, price instability and fluctuations, and speculation-related risks in addition to inherent risks of money laundering and terrorist activities.

According to NRB, no Nepali citizen residing abroad, no foreign national residing in Nepal, no Nepali business registered abroad that involves foreign investment, and no Nepali citizen residing in Nepal are permitted to engage in any type of business involving foreign investment.