The IMF urges Nepal to monitor crypto usage, which increases despite the ban

Despite a legal ban in force since 2021, crypto flows in Nepal briefly exceeded 13% of GDP that same year. In a report published on June 10, 2026, the International Monetary Fund (IMF) sounds the alarm and asks the Kathmandu authorities to establish a regulatory framework compliant with international standards. How will the authorities manage this fait accompli.

Why do cryptos thrive where they are banned?

The IMF’s finding is hardly surprising to industry observers. Cross-border crypto flows in Nepal amounted to about 5% of GDP in early 2025, behind Vietnam which shows a record level of 26%. Yet, the Nepalese ban has been strictly total since 2021. The central bank had declared trade, mining, and all related activities illegal.

This paradox is partly explained by use cases that resist restrictions best. “From a business standpoint, it makes sense to establish regulation” to protect consumers and investors, emphasizes Musheer Ahmed, founder of Finstep Asia, reached by Decrypt. 

Indeed, fund transfers and peer-to-peer trade are precisely the two pillars that neither laws nor borders easily block.

Moreover, stablecoins have gradually taken first place in these flows, a phenomenon also found in other countries with strict capital controls. This “stablecoin sandwich,” as Ahmed puts it, has established itself where bitcoin remains too volatile for everyday transactions.

The IMF and Bitcoin, increasing pressure worldwide

The report fits into a broader IMF strategy regarding countries adopting cryptos, whether by banning or encouraging them. El Salvador suffered this at the end of 2024: to secure financing of 1.4 billion dollars, Bukele had to officially give up his daily bitcoin purchases. 

Officially only, on-chain data shows that El Salvador’s government wallets continue to grow by about 1 BTC per day.

Nepal, for its part, is also going through a turbulent political period. Gen Z protests overthrew the Oli government last September, after the authorities banned 26 social media platforms. In response, tens of thousands of Nepalis downloaded Bitchat, Jack Dorsey’s decentralized app, which works via Bluetooth without an internet connection. China has since demanded its removal from the App Store.

In short, the IMF report on Nepal illustrates a reality regulators are slow to accept: the ban shifts flows, it does not eliminate them. Stablecoins are advancing, crypto remittances hold firm, and the FATF is still waiting. For Kathmandu, the choice is no longer really between banning and regulating, but between regulating now or regulating later, in a much more degraded context.