Is Crypto Legal in Nepal? The 2025 Reality Check (Arrests, Bans & CBDC)

The “Forbidden Fruit” of Nepal’s Economy

While the world adopts Bitcoin ETFs, Nepal has taken the opposite route: A Total Ban.

As of 2025, Nepal Rastra Bank (NRB) maintains one of the strictest anti-crypto stances in the world. But why? and what happens if you get caught?

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1. The Legal Status: 100% Illegal

Let’s be crystal clear: Buying, selling, mining, or even holding cryptocurrency is a criminal offense in Nepal.

The ban is enforced under two powerful laws:

1. Foreign Exchange (Regulation) Act 2019 (1962): Crypto is seen as a “financial tool” that bypasses the central bank, which is a threat to the Nepali Rupee.
2. NRB Act 2058 (2002): Only the NRB has the power to issue currency. Private currencies like Bitcoin or USDT violate this monopoly.

Latest Directives (2025 Update)

The NRB has directed all ISPs (Internet Service Providers) to block crypto-trading websites and apps. It has also instructed banks to monitor transactions for keywords like “Binance,” “P2P,” or “USDT.”

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2. Punishment: It’s Not Just a Fine

If the Central Investigation Bureau (CIB) catches you, you aren’t just slapped with a fine. You face Jail Time.

• Jail Term: 3 to 7 Years (depending on the volume).
• Monetary Fine: Up to 3 Times the amount of the transaction.
• Asset Seizure: Your bank accounts and devices will be frozen immediately.

Recent Case (2024/25): The “Crypto-Hundi” Crackdown. The Nepal Police recently arrested massive networks in Kathmandu who were using USDT (Tether) to settle “Hundi” (illegal remittance) payments. If you use crypto to send money home, you are technically engaging in Hundi, which carries double penalties.

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3. The “Pi Network” Confusion

Many Nepalis are “mining” Pi Network on their phones, thinking it’s safe because it’s free.

• The Risk: While mining on a phone might seem harmless, trading Pi for goods or cash is illegal.
• Police Warning: The CIB has strictly warned against “Network Marketing” and “Digital Investments” that promise quick returns. If Pi launches a mainnet and you try to cash out, you fall under the Foreign Exchange Act.

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4. Why the Ban? (The Government’s Fear)

It’s not that Nepal hates technology. It hates Capital Flight. Nepal’s economy relies on Foreign Reserves (USD) to import petrol and goods.

• If citizens buy Bitcoin, dollars leave the country.
• Since Nepal can’t print dollars, this depletes the national reserve, risking an economic crisis (like Sri Lanka).

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5. The Future: CBDC (Digital Rupee)

Here is the twist: Nepal likes blockchain, just not your blockchain. The NRB is actively developing a CBDC (Central Bank Digital Currency).

• What is it? A digital version of the Nepali Rupee, issued by NRB.
• Status: In the pilot/research phase (Projected wholesale pilot by 2026).
• Goal: To replace physical cash and encourage digital payments without losing control over the money supply.

Conclusion

In 2025, the risk-to-reward ratio for Crypto in Nepal is terrible. A $100 profit trade could cost you 3 years of freedom.

• Advice: Stick to NEPSE (Stock Market) for investment. It’s legal, regulated, and tax-compliant.

Disclaimer: This article explains the current legal situation. Do not interpret this as investment advice or legal counsel.