Kathmandu, Shrawan 19 - Under the proposed amendment to the Nepal Rastra Bank Act, 2058, 2058 aims to formally acknowledge a Nepal digital currency, permitting the Nepal Rastra Bank (NRB) to issue an official Central Bank Digital Currency (CBDC) along with banknotes and coins.
The provision was put on the agenda of the Finance Committee of the House of Representatives for a review of the Nepal Rastra Bank (Third Amendment) Bill, 2083. The proposed amendment would introduce a broad definition of 'currency' under the Act to include a Central Bank Digital Currency (CBDC) issued by Nepal Rastra Bank, which would enable the issuance of an official Nepal digital currency in the future. In the committee discussion, Nepal Rastra Bank Executive Director, Dirgha Rawal explained that the proposed Nepal digital currency would only be in reference to Central Bank Digital Currency (CBDC). The NRB digital currency would wholly be issued, controlled and settled by NRB.
The proposal aims to not necessarily validate the legality of privately issued cryptocurrencies or virtual currencies. The proposed amendment would then not automatically make digital assets like Bitcoin legal tender in Nepal. The legal recognition would only be given to an official Nepal Rastra Bank digital currency (CBDC) and not private cryptocurrencies. Dr Ghanshyam Upadhyay, Finance Secretary, also said that digital currency and digital banking are two different things. Digital banking, in general, means that banking services are provided electronically and a Central Bank Digital Currency (CBDC) would be an official Nepal digital currency issued or recognized by Nepal Rastra Bank.
The definition of “currency” in the current Nepal Rastra Bank Act is limited to banknotes and coins. The proposed amendment would pave the way for Nepal Rastra Bank to issue or recognize an official Nepal digital currency in the future. But the proposal is not indicative of Nepal having already initiated any official digital currency or Central Bank Digital Currency (CBDC). The amendment bill is still before the parliaments and the provisions of the bill will only become law after it has gone through the legislative process. The proposed legal recognition of a digital currency will remain without any legal effects till now, but it is a significant step towards forming a legal framework for a future NRB digital currency.
Source: Nepal News , Prasashan
