On October 6, 2017, a team from the CIB arrested seven suspects supposedly included with running "bitcoin trade" operations. The CIB clarifies that the administrators abused the request of the National Bank of Nepal that stated until the point that controls are conceived bitcoin, and other cryptocurrency exchange trade organizations are "unlawful."
The Nepal Rastra Bank’s bitcoin notice
The central bank of Nepal, Nepal Rastra Bank (“NRB”) published a notice pursuant to Nepal Rastra Bank Act 2001 (“NRB Act”) and Foreign Exchange (Regulation) Act 1962 (“FERA”) prohibiting the usage of Bitcoin in Nepal. NRB has not recognized Bitcoins as a valid currency in Nepal. NRB by the notice has declared that transactions of Bitcoin is illegal in Nepal.
What is Bitcoin?
Bitcoin was first introduced in 2009 and was first decentralized cryptocurrency created by group or individual known as Satoshi Nakamoto.It is peer to peer system where transaction take place between users directly,without any intermediary.These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain.
Bitcoin are generated by mining using the SHA-256 hashing algorithm.bitcoin can be exchanged for other currencies as more them millions merchants and vendors accept bitcoin as payment and countries have started to legalize bitcoin while some countries declared bitcoin as illegal too. Value of 1 bitcoin exceeds more then 6500US$ and the highest It have reached is about 7500US$ per bitcoin.
Why Bitcoin is illegal?
Black Money
Bitcoin is decentralized currency and Central Bank of Nepal can't track transactions which leads to higher Black Money Issues.
Law
There are no such laws to regard cryptocurrency but there are acts what recognize bitcoin illegal. That might be one reason that government claimed it to be illegal.
Technology
Nepal has no such technology to track online transaction and proper regulation to control in behave .
Effect on Economy
Unlike other transaction, Bitcoin cannot be taxed, so there will be loss of revenue. If Nepal started using bitcoins, Monetary system might get seriously effected as bit coin is very volatile currency.
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