Nepal Joins Cadre of Communist Countries Who Seek to Stifle Local Bitcoin Adoption
Nepal has emphasized the need to develop a legal framework for monitoring Bitcoin and other ‘informal channeling of funds’ during recent budget and tax announcements, joining a number of communist societies that are seeking to control the use of bitcoin.Nepal Hosts One of the World’s Six Communist Governments, Alongside China, Laos, Cuba, Vietnam, and North Korea
Nepal has recently announced its desire to devise a legal framework through which to monitor the informal channeling of funds through bitcoin and electronic currency transfers. The government also expressed its plan to implement an electronic payment system through the banking channel for the settlement of tax liabilities – hinting that it may seek to develop a national cryptocurrency similar to the ‘masterchain’ national cryptocurrency recently developed by Russia, or Singapore’s recent experiments with issuing Singaporean Dollars via distributed ledger.
The announcement that Nepal is seeking to regulate bitcoin comes in spite of the Nepalese bitcoin economy being amongst the least developed in the world, with no private exchanges offering trade between bitcoin and the Nepalese Rupee, and less than 20% of citizens connected to the internet. Although Nepal currently has not legally classified bitcoin, local papers are said to have reported that the Nepalese Central Bank has forbidden all transactions in cryptocurrency.
Nepal hosts one of the world’s six communist governments, joined by China, Laos, Cuba, Vietnam, and North Korea – all of whom exercise strict capital controls within their borders. As such, it is unsurprising that many of these governments have sought to restrict and stifle the development of bitcoin within their borders, with the developed cities of China comprising the sole exception.
China’s relationship with bitcoin has been well documented, with the threat of Chinese regulation causing numerous shake-downs in bitcoin’s price in recent years. China recently cracked down on high margin trading ratios permitted on bitcoin exchanges, describing such as having a manipulative effect upon the markets. Although China is moving toward a permissive regulatory framework pertaining to bitcoin trading and exchange operation, recent reports have alleged that Chinese officials are forcefully shutting bitcoin mines in Sichuan – where cheap hydropower has lured investment from mining operators. These reports suggest that China will likely seek to limit the adoption of bitcoin throughout the many underdeveloped, loosely governed provinces outside of China’s center, especially mining, as bitcoin could facilitate the development of a myriad of informal economies outside of Beijing’s central control.
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