The Central Bank of Nepal began to explore the possibility of launching its own digital currency, but in the next three years the Central Bank is not going to introduce it into the country’s financial system.
Revati Prasad Nepal, Director of the Foreign Exchange Department of Nepal Rastra Bank, announced the creation of a special working group that will explore the benefits and risks of the possible introduction of a state stablecoin. In addition to the technical committee, Rastra Bank has formed a steering committee headed by the deputy governor of the Central Bank of Nepal, Bam Bahadur Mishra. This committee will conduct additional consultations on the possibilities of the central bank’s digital currency. The initiative is being implemented in line with Nepal’s Monetary Policy 2021-2022. Prasad Nepal indicated that he was expecting a report from the task force on the findings within the next two weeks.
He noted that the central bank still has to do a lot of research and testing of the digital Nepalese rupee before it “comes out”. Therefore, it is too early to talk about its use for settlements and payments. However, the regulator is watching the developments of the Indian and Chinese central banks in this area. According to Prasad Nepal, Nepal Rastra Bank is in no hurry to make a decision to launch a state cryptocurrency. He expects that this can happen no earlier than in three years. If the central bank is still ready to launch its own stablecoin, for this it will be necessary to introduce appropriate amendments to the Law on the Central Bank of Nepal, Prasad emphasized.
Prakash Kumar Shrestha, Head of Economic Research at Nepal Rastra Bank, added that citizens are increasingly opting to use the digital environment for banking transactions. Therefore, people tend to buy private virtual currencies, which can have a devastating effect on the country’s financial sector. Shrestha believes that the introduction of a central bank digital currency will be an alternative solution to this problem.
In January, the Central Bank of Jordan also began to explore the potential of the state digital currency, and the Central Bank of South Korea has already reported on the successful completion of the first phase of testing the digital won.
