Is crypto legal in Nepal? Rules & regulation (2026)
Crypto is banned in Nepal.
Nepal maintains a comprehensive ban on all private cryptocurrency activities, trading, mining, holding, investing, NFTs, and DeFi, enforced through the Foreign Exchange (Regulation) Act and multiple Nepal Rastra Bank official notices, most recently expanded in April 2023 to explicitly cover DeFi, NFTs, and all virtual assets enabling offshore capital flows. No licensing or regulatory framework exists for any crypto service provider; penalties include up to seven years' imprisonment and fines of three times the transaction value. NRB is separately developing a sovereign CBDC (Hyperledger Fabric, BIS-supported) targeting an FY 2025/26 pilot, while a government task force established in December 2025 is reviewing whether the blanket ban should be reconsidered.
Legal framework
Foreign Exchange (Regulation) Act, 1962 (amended 2019); Act Restricting Investment Abroad, 1964; Nepal Rastra Bank Act, 2002 (2058 BS); enforced via NRB Official Notices (2017, Sep 2021, Apr 2023) and Nepal Police Cyber Bureau
Status by sub-area
Stablecoins
NoneStablecoins are prohibited under Nepal's comprehensive crypto ban. NRB's April 2023 notice covers all virtual assets, and the CBDC roadmap explicitly states private stablecoins will remain excluded from any future framework.
Exchanges / VASP
NoneNo licensing or registration regime exists for crypto exchanges or VASPs. All exchange activity is illegal under the Foreign Exchange (Regulation) Act and NRB notices; Nepal Police Cyber Bureau prosecutes operators and users.
Token Offerings
NoneToken sales, ICOs, and STOs are implicitly banned as crypto transactions. No securities-law classification, prospectus requirement, or investor-exemption framework for token offerings exists; the Securities Board of Nepal (SEBON) has issued no guidance.
Custody
NoneNo custodial services for digital assets are legally permitted. Because crypto holding is itself illegal, no regulated custody framework, segregation requirement, proof-of-reserves standard, or insurance mandate exists or can be offered by any licensed Nepali financial institution.
DeFi
NoneDeFi is explicitly prohibited. NRB's April 2023 notice specifically named Decentralized Finance activities as illegal — one of the few central bank notices globally to do so explicitly — extending the ban to DeFi protocols, DAOs, and related front-ends accessible from Nepal.
Tax
UnclearTax treatment is legally paradoxical: the Inland Revenue Department claims authority under Income Tax Act, 2058 to levy CGT (5% long-term, 7.5% short-term for individuals) and 13% VAT on crypto-denominated supplies, even though the activity is banned. No formal crypto-specific tax legislation has been enacted; a draft bill to classify digital assets as intangible movable property was expected in late 2025 but had not passed as of mid-2026.
Still pending: Bill classifying digital assets as intangible property not yet passed
Key points: crypto & digital assets in Nepal
Comprehensive NRB Ban, Three Waves
NRB issued official notices in 2017, September 2021, and April 2023 progressively expanding the prohibition from Bitcoin/general crypto to NFTs, DeFi, and all virtual assets that could enable offshore investment or undermine foreign-exchange controls.
Legal Basis and Severe Penalties
The prohibition rests on the Foreign Exchange (Regulation) Act, 1962 (as amended 2019) and the Act Restricting Investment Abroad, 1964. Penalties: up to 3 years imprisonment (up to 7 years if transaction exceeds NPR 10 million), fines up to 3× the transaction value, and full asset confiscation.
Active Enforcement, 658 STRs Filed
Nepal Police Cyber Bureau actively investigates crypto violations; 658 suspicious virtual-asset transaction reports (STRs) were recorded between 2021 and July 2025, with 252 reports in 2024 alone, indicating intensifying enforcement.
CBDC Pilot Underway, Private Crypto Explicitly Excluded
NRB is piloting a sovereign CBDC pegged 1:1 to the Nepalese Rupee (Hyperledger Fabric, BIS technical support), targeting a pilot in FY 2025/26 and retail launch by 2027. NRB has explicitly stated private crypto and stablecoins remain excluded from any future legalization.
Task Force Reviewing Crypto Rules (Dec 2025)
A government task force was established in December 2025 to reassess Nepal's approach to crypto regulation, signalling potential future policy reconsideration. No legislative changes have been enacted as of mid-2026.
Tax Paradox, IRD Claims Jurisdiction Despite Ban
Nepal's Inland Revenue Department asserts authority under Income Tax Act, 2058 to tax crypto gains (5% CGT long-term, 7.5% short-term for individuals; 13% VAT on crypto-denominated supplies) even though trading is banned, creating a contested legal inconsistency. A draft bill to classify digital assets as intangible movable property was expected in Q4 2025 but had not been enacted as of mid-2026.
Sources
- nrb.org.np/contents/uploads/2021/09/FXMD-Notice-03-207879-Cryptocurrency.pdf
- nrb.org.np/2020/11/%E0%A4%A8%E0%A5%87%E0%A4%AA%E0%A4%BE%E0%A4%B2%E0%A4%AE%E0%A4%
- nrb.org.np/cmd/central-bank-digital-currency-cbdc-identifying-appropriate-policy
- nepalnews.com/s/nation/cryptocurrency-illegal-nrb/
- english.khabarhub.com/2026/02/514146/
- risingnepaldaily.com/news/73533
- newbusinessage.com/news/43475/nrb-accelerates-plans-to-pilot-digital-currency-by-fy-2025
- nepalmonitor.com/2025/12/24/nepal-task-force-calls-for-fresh-look-at-crypto-rules/
- finance.yahoo.com/news/nepal-central-bank-plans-cbdc-043000911.html
- lawgandhi.com/cryptocurrency-laws-in-nepal/
- coinfomania.com/crypto-taxation-in-nepal-a-complete-guide/
- ainvest.com/news/nepal-taxes-crypto-gains-trading-ban-2506/
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