Nepal Moves to Grant Legal Status to Central Bank Digital Currency

Nepal is preparing to take a major step toward a digital financial system by granting legal tender status to a central bank digital currency (CBDC). The proposal has been included in the Nepal Rastra Bank (Third Amendment) Bill, 2083, tabled in the Federal Parliament by Finance Minister Dr. Swarnim Wagle. If endorsed by Parliament, the amendment will allow a CBDC issued by Nepal Rastra Bank (NRB) to be used in the same manner as physical banknotes and coins for purchasing goods and services, as well as settling public and private debts. The bill revises the legal definition of "currency" to formally include "digital currency," marking a significant milestone in Nepal's financial and monetary framework. The proposed legal recognition of a CBDC is expected to accelerate Nepal's transition toward a digital economy. Officials believe it could substantially reduce the government's expenditure on printing, transporting, and managing physical cash while promoting cashless transactions and enhancing the country's digital payment ecosystem. Greater transparency in digital transactions is also expected to help curb the informal economy and expand financial inclusion, particularly in underserved areas. Beyond digital currency, the amendment broadens the scope of institutions regulated by Nepal Rastra Bank. Digital-only banks, financial holding companies, remittance service providers, payment system operators, and payment service providers would all come under the central bank's formal regulatory and supervisory framework. The move is intended to eliminate existing legal ambiguities surrounding emerging financial technologies and strengthen consumer protection by ensuring stricter oversight of digital financial services. Once enacted, the legislation would position Nepal among a relatively small group of countries providing explicit legal backing for both a central bank digital currency and digital banking under a comprehensive regulatory framework. Globally, the adoption of CBDCs remains limited despite growing interest. Countries such as the Bahamas (Sand Dollar), Nigeria (eNaira), Jamaica (Jam-Dex), Zimbabwe, and the Eastern Caribbean Currency Union have already launched retail CBDCs. Meanwhile, major economies including China and India continue expanding pilot programs, with China testing the digital yuan across dozens of cities and India integrating the digital rupee with QR-code payments and offline wallets. Russia and the United Arab Emirates are also conducting trials, while the European Union and the United Kingdom remain in the research phase. In contrast, the United States has yet to move forward with a CBDC, citing concerns over privacy and the growing role of private stablecoins.