Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The issue of crypto mining has sparked a heated discussion in Nepal’s Federal Parliament’s Finance Committee during deliberations on the Banks and Financial Institutions Act (BAFIA). Nepali Congress leader and MP Binod Chaudhary has called for the legalization of cryptocurrency mining in Nepal, arguing it could unlock significant economic potential. “Nepal must open up crypto mining. Many countries worldwide have leveraged it to build robust economies,” Chaudhary stated, emphasizing the need for a progressive approach.
Chaudhary clarified that his proposal focuses solely on mining, not trading, which remains banned by the Nepal Rastra Bank (NRB). He highlighted the potential for substantial revenue, suggesting that integrating supportive provisions into BAFIA could enable NRB to facilitate this industry. “Countries that have embraced such opportunities have reaped benefits. Nepal’s hydropower surplus could power this venture, generating massive income,” he added.
Globally, crypto mining has become a lucrative sector, with varied regulatory approaches. Bhutan, a neighboring Himalayan nation, reportedly earned over $1 billion from crypto mining last year, utilizing its abundant hydropower to sustain large-scale operations. This success has positioned Bhutan as the fifth-largest national Bitcoin holder, with reserves valued at $1.2 billion, showcasing a strategic use of renewable energy.
Similarly, countries like the United States, Canada, and El Salvador have legalized mining, integrating it into their economies, while others, such as China and Pakistan, face hurdles due to regulatory or infrastructural challenges. Bhutan’s model, powered by partnerships like Bitdeer Technologies, contrasts with Nepal’s current ban, enforced under the NRB Act and Foreign Exchange Regulation, which deems all crypto activities illegal.
Despite the global trend, Nepal’s context remains complex. The NRB has consistently opposed crypto due to risks like money laundering and energy consumption—Bitcoin mining alone uses 127 terawatt-hours annually, rivaling Norway’s total usage. Critics argue Nepal’s unstable grid and forex reserves could suffer, especially during winter power shortages.
However, supporters like Chaudhary see hydropower as a game-changer, potentially mirroring Bhutan’s sustainable approach. The parliamentary debate now hinges on whether BAFIA can accommodate this shift, with no clear timeline for a decision. As the discussion unfolds, Nepal stands at a crossroads, weighing economic gains against regulatory risks in an increasingly crypto-driven world.
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