What are the risks of holding cryptocurrencies in Nepal?

If you are in Nepal and want to buy or hold cryptocurrencies such as Bitcoin, Ethereum, and other digital assets, you may need to first understand the local legal environment. Nepal is one of the few countries in the world that has implemented an absolute ban on cryptocurrencies, which means that engaging in the production, holding, trading, and use of cryptocurrencies is legally prohibited in the country.

The True Face of Global Cryptocurrency Bans

Nepal’s strict stance is not an isolated case. According to the latest statistics, there are 51 countries and regions worldwide that have imposed varying degrees of restrictions on cryptocurrencies. Among them, 9 countries have adopted the strictest “absolute ban” policy, including Nepal. This list also includes Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Qatar, and Tunisia.

A relatively milder approach is the “implicit ban” practiced by 42 countries—these countries may allow individuals to hold crypto assets but prohibit banks and formal financial institutions from providing related services, and also ban local exchanges from operating legally. Kazakhstan, Turkey, Lebanon, the Democratic Republic of the Congo, Indonesia, Nigeria, and others fall into this category.

Why are countries so conservative in their stance?

The main reasons behind the implementation of cryptocurrency bans in various countries revolve around several core concerns:

Financial stability and monetary sovereignty are the primary considerations. Governments worry that cryptocurrencies could impact fiat currencies and weaken the central bank’s policy transmission. Developing countries like Nepal are especially concerned about this, as their domestic currencies are already under significant international pressure.

Anti-money laundering (AML) and counter-terrorism financing (CTF) are also important reasons. The cross-border flow characteristics and relative anonymity of cryptocurrencies make it difficult for regulators to trace the source and use of funds. Additionally, capital controls drive many countries to impose bans—many nations seek to prevent capital outflows by restricting cryptocurrency activities.

Some countries also worry about social risks that cryptocurrencies might trigger—ranging from investment bubbles and energy waste to frequent scams—all of which are factors behind the bans.

Practical enforcement challenges

It is worth noting that there is often a gap between legal prohibitions and actual enforcement. Even in Nepal, some citizens participate in cryptocurrency trading through VPNs and overseas platforms. However, doing so carries legal risks, and if caught, individuals may face fines or even criminal penalties.

If you are considering trading in a country where cryptocurrencies are restricted, understanding the local legal boundaries is an essential first step. Instead of trying to circumvent regulations, it is better to wait for policy evolutions—many countries that initially had bans are gradually adjusting their stance and exploring more balanced regulatory frameworks.