# IMF Urges Nepal to Regulate Crypto as Usage Rises

**Published:** 2026-06-12T12:19:11.789Z  
**Topic:** Crypto Mining  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/116dacae-5682-4a55-87f3-3f987be5064b

Despite a 2021 ban, crypto flows in Nepal hit $2.6 billion in 2021. The IMF now urges regulation to protect financial stability and curb illicit flows.

The International Monetary Fund has urged Nepal to establish a regulatory framework for cryptocurrency, citing a marked increase in digital asset flows despite a national prohibition [1]. In its 2026 Article IV Consultation report, the IMF noted that crypto inflows peaked above 13% of GDP in 2021, reaching $2.6 billion, before rebounding to nearly 8% of GDP in 2024 [1]. The organization warned that the current ban has driven activity underground, posing risks to financial stability and capital controls [3].

**Key takeaways**
*   Crypto inflows in Nepal peaked at over $2.6 billion in 2021, exceeding 13% of GDP, despite a ban on trading and mining [1].
*   The IMF recommends Nepal replace its prohibition with regulations aligned with international standards to curb illicit flows and protect consumers [1].
*   Stablecoins represent a growing share of crypto activity, with cross-border flows estimated at 5% of GDP in early 2025 [1].
*   An expert suggested that regulating use cases like trading and remittances is more effective than banning the technology [1].

## Flows surge despite 2021 prohibition
Nepal Rastra Bank declared all crypto trading, mining, and related activities illegal in 2021 [3]. Despite this, IMF data indicates that flows of stablecoins and unbacked crypto assets grew significantly between 2019 and 2024 [1]. Crypto inflows were negligible in 2020 but exceeded $2.6 billion in 2021, briefly topping 13% of GDP [1]. While volumes fell to roughly 4% of GDP in 2023, they climbed back toward 8% in 2024, with stablecoins making up a larger and growing share [1]. The Fund estimates that Nepal's crypto-related cross-border flows stood at about 5% of GDP in early 2025, a figure higher than Bangladesh and Myanmar but significantly lower than Vietnam's estimated 26% [1].

## IMF pushes for international standards
The IMF argues that a complete ban has failed to stop activity and instead makes monitoring difficult, potentially driving it underground [3]. It warned that unregulated flows could be used to circumvent capital controls, facilitate illicit fund movements, and trigger large-scale deposit outflows from the formal banking system [3]. Consequently, the Fund urged Nepal to adopt a regulatory framework aligned with international standards to strengthen financial stability and consumer protection [1]. It also pressed the country to

## Sources
1. Decrypt — [IMF Urges Nepal Monitor Crypto as Usage Rises Despite Ban](https://decrypt.co/370738/imf-urges-nepal-monitor-crypto-as-usage-rises-despite-ban)
2. Digitaltoday — [Nepal crypto trading rises despite ban; IMF urges faster ...](https://www.digitaltoday.co.kr/en/view/62711/nepal-crypto-ban-trading-rises-imf-urges-faster-regulation)
3. Coinalertnews — [IMF Advises Nepal to Regulate Crypto as Stablecoin Inflows ...](https://coinalertnews.com/news/2026/06/11/imf-nepal-crypto-regulation-stablecoin)

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Cite as: TrendWatcher, "IMF Urges Nepal to Regulate Crypto as Usage Rises", https://www.trendwatcher.in/article/116dacae-5682-4a55-87f3-3f987be5064b