Government Report Highlights High Risk of Money Laundering Through Digital Currencies

September 11, Kathmandu – The government has identified real estate, precious metals, digital currencies, and legal entities as the primary sectors vulnerable to money laundering. This year, the government has highlighted significant risks associated with digital currencies through a comprehensive analysis. A detailed assessment was conducted on potential risk areas for money laundering and terrorist financing activities. According to the evaluation report, the highest risk sectors in Nepal include real estate, precious metals, digital currencies, and legal persons.

The Office of the Prime Minister and Council of Ministers carried out this risk assessment following the action plan issued by the Financial Action Task Force (FATF). Although a similar evaluation was performed in 2020, fintech and digital currencies were not included then. However, the 2026 risk assessment report now incorporates an extensive review of the fintech sector along with the identification of risks. The report notes moderate risk levels in banking, cooperatives, fintech, casinos, remittances/hundi, and the securities sectors.

The assessment states that the likelihood of criminal activities and terrorist financing through these sectors remains low. A Nepal Rastra Bank official involved in the process explained that the Office of the Prime Minister collaborated with relevant ministries, the Financial Information Unit, and other agencies in conducting the money laundering and terrorist financing risk assessment. “This evaluation was carried out by domestic experts in cooperation with the World Bank,” the official added, “and was performed in line with the FATF action plan given to Nepal.”

According to the official, Nepal shows a high risk mainly in money laundering, while the risk of terrorist and criminal financing remains comparatively low. Nepal has been on the FATF grey list for about one and a half years due to insufficient implementation of effective reforms. The FATF has provided a two-year action plan, which includes periodic risk assessments of the country’s vulnerabilities.