Nepal proposes legal framework for Digital Currency in landmark bill amendment

KATHMANDU: In a landmark move poised to redefine the financial landscape of Nepal, a proposal to amend the Bank and Financial Institutions Act 2073 has been registered in the House of Representatives, aiming to introduce digital currency into the country’s monetary framework.

At the heart of this legislative initiative lies the definition of ‘digital currency,’ elucidated within the confines of the bill’s parameters. As per the proposed amendment, ‘digital currency’ is delineated as currency issued digitally by the Central Bank of Nepal, marking a pivotal step towards embracing modern financial technologies.

Key to this amendment is Chapter 7 of the current Act, housing provisions pertinent to banking and financial transactions. Section 49, residing within this chapter, traditionally delineates the scope within which banks and financial institutions can conduct their operations.

However, the proposed bill seeks to expand upon these provisions, envisaging a future where digital currency finds its place in mainstream financial transactions. By incorporating clauses pertaining to the acceptance and disbursement of digital currency within this section, the bill lays the groundwork for the integration and proliferation of digital currency usage within Nepal’s financial ecosystem.

The Ministry of Finance underscores the global trend towards the adoption of digital currency, citing Nepal’s forthcoming endeavors to align itself with this evolving financial paradigm. With preparations underway to introduce digital currency, the ministry emphasizes the imperative need for requisite legal frameworks to facilitate this transition seamlessly.

Preceding this legislative proposal, Nepal Rastra Bank had undertaken an internal study delving into the feasibility and implications of digital currency adoption. The findings of this study, if the proposed bill garners parliamentary approval, would pave the way for the legalization and institutionalization of digital currency usage within Nepal’s economic landscape.

The implications of this proposed amendment extend far beyond the realm of monetary transactions, transcending into the realms of financial inclusion, technological innovation, and economic empowerment. By embracing digital currency, Nepal stands poised to leapfrog traditional barriers, unlocking new avenues for economic growth and prosperity.

As the bill navigates through the legislative process, stakeholders across the financial spectrum eagerly anticipate the dawn of a new era in Nepal’s financial narrative—one characterized by the seamless integration of digital currency and the promise of a more inclusive and resilient financial future.