The Central Bank Digital Currency (CBDC), which is being used and tested worldwide in the financial sector, will take at least four more years to be implemented in Nepal. In the first phase, instead of 'Retail CBDC' which is used by common people, Nepal Rastra Bank aims to start implementation with 'Wholesale CBDC' which is used in transactions between banks and financial institutions. For the cross-border CBDC, the central bank has not been able to estimate the deadline.

In which countries of the world CBDC is used in which conditions, what modality or architecture are adopted and what are the results? Recently, the National Bank has prepared a study report on international practices on issues such as technical management along with regulation. Digital currency (CBDC) is a relatively new concept issued by central banks of various countries as an alternative to the paper currency currently in use. Therefore, it seems that most of the countries are in the stage of study and initial use in how to proceed. 

In the Rashtra Bank's report, under the title of 'Roadmap for CBDC Implementation', it is stated that the pilot test of Wholesale CBDC will be held in August 2026 in the Fourth Strategic Plan of the Rashtra Bank. Retail CBDC will be decided from June 2027 and for cross border CBDC in December 2026. Rastra Bank established a separate CBDC unit under its Payment System Department in July 2023. 

'CBDC is currently in vogue at the international level, we have prepared a study report for internal purposes on how it is working in other countries, what is the experience,' says Rashtra Bank spokesperson Gunakar Bhatt, who is also the executive director of the Payment System Department, 'CBDC is in some countries. If the concept is successful, some people seem to wait and see. There is technical confusion about whether to go with Distributed Ledger Technology (DLT). We also have not reached any conclusion.'  In the

study report, three types of CBDCs, wholesale, retail and cross-border, have been practiced in different countries. The report mentions that the Reserve Bank of India has used the wholesale CBDC concept for large-scale payments between banking institutions, securities transactions and liquidity management, and the Royal Bank of Australia has identified the use of retail CBDC in 14 areas such as web three commerce, offline payments, and automatic revenue collection.&nbsp ;

Likewise, the study report of the National Bank has also explained about the cross-border CBDC project 'Ambridge', which has been initiated by the Bank of International Settlements (BIS) and the central banks of China, Hong Kong, Thailand and the United Arab Emirates (UAE) for three years. "The Ambridge project has identified 15 potential areas for cross-border CBDC use, including international trade management, finance and trade," the study said. '

Cross-border payments also found a good place of unity among South Asian countries. Under the leadership of Nepal Rastra Bank, the 'SAARC Governor's Group' comprising the central banks of eight countries of the South Asian Cooperation Organization (SAARC) also conducted a joint study of CBDC. Although a study was conducted on whether a 'common digital currency' could be used in the SAARC countries, it did not gain momentum. Rashtra Bank spokesperson Bhatt says that the issue of inter-country payment is not only desired by one country.

In the budget statement and monetary policy of the fiscal year 2079/80 in Nepal, it was said that a feasibility study will be conducted on digital currency for the first time. Digital currency is also mentioned in the budget for the year 2080/81 and the current year. The then Finance Minister Barshman Pun in his budget speech included the subject of central bank digital currency preparation in the financial sector reforms that he put under the five strategies of economic reforms. In recent years, CBDC has been given priority in the financial policy of the country. 

'Currently, our notes are printed abroad, the cost is huge, while transporting notes from abroad, expenses are also being incurred there, after the implementation of CBDC, these costs will be reduced,' Rashtra Bank spokesperson Bhatt said, 'CBDC can be a good concept from the point of view of frugality and financial inclusion. . It can be delivered to many people. People can use it as soon as they have a mobile. Rastra Bank had earlier prepared a concept report on CBDC in October 2079.

Spokesman Bhatt clarified that it will take a few years to implement CBDC as technological infrastructure and manpower management are important along with digital infrastructure such as hardware/software. Most of the countries have used DLT i.e. distributed ledger technology for CBDC purposes and some have adopted both DLT and traditional technologies, so it will take some time for the technology to mature in a country like Nepal, the study concludes.