Will The Nepal Rastra Bank Allow Digital Currencies?
The monetary authority would be able to produce a digital version of the nation’s fiat currency, the Nepalese rupee, if the Nepal Rastra Bank (NRB) were to amend the statute defining its powers and responsibilities. The report comes after a research that found a central bank digital currency (CBDC) to be a workable initiative. The head of the bank’s currency management division, Revati Nepal, claims that a task team has already created an amendment bill. According to him, as stated by the Kathmandu Post on Sunday, they will send the bill to the government to table it in parliament after internal debates. The Nepal Rastra Bank Act will be amended starting in 2002.
With its Monetary Policy 2021–22 document, the NRB announced the research on the topic. Revati Nepal’s team proposed that the regulator should provide the legal provisions necessary for it to execute the CBDC before constructing it. The creation of a legal framework for the digital currency is one of the specific actions that the experts have now said should be taken. The NRB representative added that there are recommendations for technical and economic factors to be taken into consideration.
The Market Study by Nepal
The CBDC will have a unique digital wallet created by the central bank so that digital banking transactions may be made there. Nepal said that the measures will also be taken to investigate interoperability with the digital payment service providers. The chief was unequivocal in saying that the Nepal Rastra Bank is taking its time issuing the digital money. The Himalayan nation’s monetary authority wants to first study how South Asian neighbours, particularly China and India, go forward with the introduction of their CBDCs.
Nepal stressed that they don’t want to introduce digital currency too quickly and incur an unwarranted risk. Nirmala Sitharaman, the finance minister of Nepal’s southern neighbour India, declared in February that the most populous democracy in the world intended to introduce a digital form of its currency during the current fiscal year, which started on April 1. The Reserve Bank of India (RBI) is anticipated to launch the digital currency in 2023, making it one of the largest economies to do so.
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