Finance Minister Dr. Yuvaraj Khatiwada has shown enthusiasm to begin cryptocurrency in Nepal. Finance Minister Khatiwada has put forward such progressive desire as the central bank of Nepal - Nepal Rastra Bank has banned the trading or mining of any virtual currency within the country’s territory. A lot of people willing to mine or trade cryptocurrency in Nepal have been prevented since the NRB made a decision back in 2017.
What did FinMin say?
Addressing the 28th Anniversary Celebrations of the Nepal Securities Board, Khatiwada said that in the changing situation, our transactions have to be done in virtual currency as well. “We have to use virtual currencies from crowdfunding to cloud sourcing. For that, we have to increase our capacity and increase literacy in the market,” said Khatiwada.
In the program, Khatiwada added that even though our destination is to grow ourselves as cryptocurrency traders, the literacy in the capital market is very low at the moment and for now we need to focus on it. “While we are making structural and legal reforms, market literacy has not reached the level. If we mobilize capital by increasing literacy, the capital market operations will increase and sufficient liquidity will be added here. We will not have to add it from a foreign country,” he said.
Khatiwada also instructed the board to expedite the operation and regulation of the commodities market. He said that although the barter market did not seem possible for the time being, it will be very important in the long run.
What is Cryptocurrency?
Cryptocurrency is an internet-based medium of exchange that utilizes cryptographical functions to conduct monetary transactions. Blockchain technology is used in cryptocurrency to achieve decentralization, transparency, and immutability. Cryptocurrency is not controlled by any central authority and this is one of the most important features of it. The cryptocurrency is apparently resistant to the old methods of government control and interference as it has the decentralized nature of the blockchain.
Cryptocurrencies can be transferred directly within two parties via the use of private and public keys. These transactions can be done with minimal processing fees, enabling users to avoid the abrupt fees imposed by traditional financial institutions. There are currently thousands of cryptocurrencies in circulation around the world - Bitcoin, Ethereum to name a few. Trading and mining through such currencies have been banned in Nepal for the past three years. In India, such restrictions were lifted only three months ago following a Supreme Court order.
Cryptocurrency in Nepal!
The cryptocurrency was formerly legal in Nepal as there was no rule for it. Nepal Rastra Bank later amended a Foreign Exchange Regulation Act and has officially declared Bitcoin and other cryptocurrencies as unlawful forms of financial transactions. In 2017, the Central Investigation Bureau(CIB) even arrested two individuals for administering Bitcoin mining and exchange works in the country.