The International Monetary Fund has urged Nepal to strengthen monitoring of crypto activity across its financial system, as reported by the IMF. According to IMF reports, crypto inflows in Nepal rose sharply after the 2021 ban on trading and mining took effect. The report tracked activity between 2019 and 2024 using revised economic estimates and financial surveillance data. Inflows exceeded $2.6 billion in 2021, which temporarily crossed 13 percent of Nepal's GDP based on revised calculations. By 2023, crypto-related activity dropped to around four percent of GDP, but IMF data showed renewed movement in later reporting periods. Volumes climbed back toward 8% of GDP by 2024, with stablecoins making up the larger and growing share of these flows.
Stablecoins have become a larger part of transaction flows during this phase, as reported by the IMF. Users shifted toward cross-border payment channels according to IMF monitored data. Early 2025 estimates placed Nepal's crypto flows near five percent of GDP, with this level remaining higher than several regional peers. The IMF report showed that stablecoin activity has expanded faster than unbacked crypto in emerging markets, linked to increasing use in payment settlements. These assets became more widely used for cross-border transfers during the review period, continuing despite restrictions in domestic policy. On cross-border flows, the Fund pegged Nepal at around 5% of GDP in early 2025, ahead of Bangladesh and Myanmar but far behind Vietnam at roughly 26%.
The IMF stated that Nepal needs stronger oversight of digital asset flows, as reported by the IMF. The fund said financial stability requires tighter monitoring systems and improved compliance frameworks. The IMF warned that such flows can challenge existing capital control systems and highlighted risks linked to cross-border transfers through unregulated channels. IMF officials noted that enforcement gaps allow continued use of digital assets despite legal bans, pointing to ongoing surveillance challenges in developing economies. The IMF wants a regulatory framework aligned with international standards, saying it "would help safeguard financial stability and integrity and consumer protection, while limiting circumvention of capital controls or large-scale deposit outflows."
Nepal imposed a full ban on crypto transactions in 2021 after the central bank classified them as illegal, as reported by the IMF. The central bank maintained that all crypto trading and mining remain prohibited under national law, with authorities continuing enforcement actions against illegal platforms across the country. The IMF's warning echoes previous clashes with other countries, including previous clashes with El Salvador over Bitcoin accumulation. The IMF has spent years pressing governments to rein in crypto, most visibly El Salvador, which scaled back its Bitcoin experiment in December 2024 to land a $1.4 billion fund facility. The IMF's findings came in the Fund's 2026 Article IV Consultation, published as its Executive Board completed the seventh and final review under Nepal's Extended Credit Facility on June 5.
