Nepal Rastra Bank (NRB) has drafted a revision of the Nepal Rastra Bank Act to enable the central bank to issue a central bank digital currency (CBDC), the Kathmandu Post reported. It aims to send the legislation to parliament for consideration.
Last year the central bank initiated a digital currency feasibility study group headed by Revati Nepal, who leads the central bank’s currency management division. The conclusion is that a CBDC is feasible, but it wants to consider additional technical and economic issues, in addition to changes in legislation.
It’s working on a digital wallet to be integrated with digital banking and enable interoperability with digital payment firms.
Before issuing a digital currency, the central bank wants to see what happens in China and India. “We don’t want to take the unnecessary risk by rushing into introducing digital currency,” said Nepal. China’s digital yuan is in the advanced stages of piloting, and India plans to start the phased introduction of the digital rupee this year. Roughly two-thirds of Nepal’s imports and exports are with India.
Meanwhile, Nepal is home to a company working on CBDC, Rumsan. It is a finalist in the G20 TechSprint hackathon hosted by the Bank of Indonesia and BIS Innovation Hub. One of the company’s subsidiaries also received a $100,000 investment last year from UNICEF for a mobile phone-based blockchain application enabling relief aid distribution using tokens.