Nepal has created a prototype for its own digital currency. The prototype is based on the code from Project Aurum, developed by the BIS Innovation Hub in Hong Kong. It is designed for wholesale Central Bank Digital Currency (CBDC) use.
Pilot Testing Planned Within Two Years
Nepal Rastra Bank (NRB) plans to start pilot testing its digital currency within the next two years. This goal is mentioned in the bank’s latest report, which highlights its main achievements over the past five years. The report confirms that CBDC prototype development and testing will be done by 2026.
Special Department for Digital Currency Already Formed
To support the digital currency project, NRB has formed a dedicated department under the Payment Systems Department. This new unit is led by a director and already has technical staff in place to handle CBDC-related work.
CBDC Development Will Follow Five Stages
NRB will develop the digital currency in five stages. The first stage focuses on identifying the use cases—whether it will be used for retail, wholesale, or cross-border payments. In this stage, they are also working on design features and setting policy goals.
Feedback from Stakeholders Included in Planning
The central bank has already collected feedback through discussions with different stakeholders. Based on this feedback, they are moving ahead with the CBDC project. Nepal Rastra Bank is also receiving technical help from the International Monetary Fund (IMF) for this project.
Proof of Concept and Prototype Completed
In the second and third stages, the bank completed both the “proof of concept” and the digital currency prototype. Based on these, the fourth stage will involve pilot testing of the CBDC.
Technical Exchange with Global Institutions
NRB is also working closely with international institutions to gain technical knowledge. The bank signed a non-disclosure agreement (NDA) with the BIS Innovation Hub and is participating in their Project mBridge quarterly meetings as an observing member.
Global and Regional Studies Conducted
The central bank has completed a global comparative study on digital currencies from 49 countries. The report is titled Exploring the Global CBDC Landscape: Comparative Study of Selected National Initiatives. Additionally, NRB has led a SAARCFINANCE collaborative study titled Prospects of Central Bank Digital Currency in the SAARC Region.
