Stablecoin issuer / redeemer in Nepal
Issues a fiat-pegged stablecoin to the public, operates redemption, and holds reserves backing the float.
Stablecoin issuer is not permitted in Nepal.
Verdict Details
- Permitted
- no
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- N/A — all cryptocurrency activities, including stablecoin issuance and dealing, are prohibited by Nepal Rastra Bank (NRB) directives. No AML/CTF obligations apply to a non-permitted activity.
- Entities engaging in prohibited crypto activities face prosecution under the Foreign Exchange (Regulation) Act, 2019, not AML-specific regulation.
Key Restrictions
- Stablecoin issuance is illegal — the Nepal Rastra Bank (NRB) has consistently prohibited the use, trade, mining, and investment in cryptocurrencies, including stablecoins.
- No licensing regime exists for stablecoin issuers or any crypto-related business.
- Foreign-issued stablecoins are also prohibited for use locally.
- Cross-border transactions involving cryptocurrencies are treated as unauthorized foreign exchange activities under the Foreign Exchange (Regulation) Act, 2019.
- Penalties include fines, imprisonment, and confiscation of assets.
Key Risks
- Criminal prosecution risk: engaging in stablecoin issuance or redemption in Nepal is an illegal activity punishable by fines, imprisonment, and asset seizure.
- No legal recourse: individuals and entities dealing in stablecoins operate outside the legal framework with no protected rights or protections.
- Enforcement precedent: NRB has issued multiple public circulars and press releases (e.g., September 2021) affirming the ban, and authorities can pursue prosecution under the Foreign Exchange Act.
- Regulatory ambiguity: none — the prohibition is clear and consistently reaffirmed.
- Tax exposure: gains from illegal crypto activities may still be pursued by the Inland Revenue Department under general income tax law, and reporting would be self-incriminating.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Stablecoins are not officially classified as e-money, payment tokens, or securities because they, along with all other cryptocurrencies, are considered illegal virtual assets. The NRB broadly refers to them as "virtual currencies" or "cryptocurrencies," and their use or transaction is prohibited.
Since stablecoins are prohibited, there are no prescribed reserve requirements. No entity is legally permitted to issue or operate stablecoins, and therefore, no regulatory guidelines for their reserves exist.
Similarly, there is no licensing regime for stablecoin issuers. Issuing stablecoins (or any cryptocurrency) in Nepal would be an illegal activity under current regulations.
As stablecoins are not recognized or regulated, there are no legally protected redemption rights. Individuals engaging with stablecoins do so at their own risk, outside the legal framework, and would have no recourse for redemption or protection under Nepalese law.
The NRB has consistently issued circulars and public notices warning against and prohibiting the use, trade, mining, and investment in cryptocurrencies.
Non-existent. Since cryptocurrencies are prohibited, there is no legal basis or framework for issuing licenses to operate as a crypto custodian. Any entity attempting to provide such services would be operating outside the law.
The NRB has consistently issued circulars and public notices warning against the use and trading of cryptocurrencies like Bitcoin since as early as 2017. These notices typically cite the Foreign Exchange (Regulation) Act, 2019 (B.S. 2076) and its subsequent directives as the legal basis for prohibiting foreign exchange transactions (which cryptocurrencies are often categorized as for regulatory purposes) not authorized by the NRB.
Foreign Exchange (Regulation) Act, 2019 (B.S. 2076):
Legal Status: Cryptocurrency is illegal in Nepal.
Fines: Significant monetary penalties.
Imprisonment: Jail terms depending on the scale and nature of the offense.
Confiscation of Assets: Seizure of assets involved in or derived from illegal crypto activities.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Prohibited — all cryptocurrency activities, including stablecoin issuance and redemption, are illegal in Nepal under NRB directives and the Foreign Exchange (Regulation) Act, 2019, with no licensing, reserve, or redemption framework; foreign stablecoins are also prohibited.
Questions this verdict aims to answer
- What e-money or banking license is required to issue?
- What reserve composition, segregation, and audit rules apply?
- What redemption rights must be granted to holders?
- Are foreign-issued stablecoins permitted for use locally?