- Trending
- Comments
- Latest
Nepal’s government has begun receiving crypto-funded flood relief for the first time, despite the country’s ban on cryptocurrency trading, after Cross River Bank, Polygon and a US nonprofit built a channel that converts donations into dollars before they ever reach Nepali soil.
By Monday, the arrangement had delivered $500,000 in crypto-to-fiat donations to the government’s relief fund, according to Finance Minister Swarnim Wagle. Under the system, donors send cryptocurrency from outside Nepal, where it is converted into US dollars before the proceeds are transferred through the formal banking system and ultimately converted into Nepali rupees.
“We have opened a facility to deposit digital currencies in Cross River Bank and bring the money into Nepal as dollars,” — Swarnim Wagle, Nepal’s Finance Minister. “I expect a substantial amount to come in through this facility in the coming days.”
The arrangement emerged after devastating floods along the Bhotekoshi river prompted cryptocurrency companies, users and communities abroad to seek a way to support disaster relief without breaching Nepal’s laws.
A new portal, NepalRelief.org, accepts donations in major cryptocurrencies including Ethereum, Polygon and Solana. By Monday, the portal had raised $174,831.
The initiative brings together blockchain network Polygon, US financial technology company Cross River Bank and Engage Nepal, an organisation led by former US ambassador to Nepal Scott DeLisi.
Polygon’s Open Money Stack and Coinme provide the technology required to collect the digital assets, bridge them and convert them into USDC, a dollar-pegged stablecoin. Engage Nepal receives the funds in a publicly disclosed wallet and conducts an audit before Cross River Bank converts the assets into US dollars within the US-regulated financial system.
The dollars are then sent to Nepal’s official relief fund through the SWIFT banking network.
That structure means crypto relief donations remain outside Nepal’s financial system until they have been converted into conventional currency.
Pravesh Rijal, executive vice-president at Cross River Bank, said the entire conversion process takes place outside Nepal because cryptocurrency is prohibited in the country.
“The entire process is settled in the United States, where the collected crypto is converted into dollars and sent to Nepal through the regulated banking system,” — Pravesh Rijal, executive vice-president, Cross River Bank.
The system was developed following discussions between Rijal and Sandeep Nailwal, founder of the Polygon Foundation. Nailwal had expressed an interest in helping people affected by the floods, prompting the two to explore how crypto relief donations could reach Nepal without violating its restrictions on digital assets.
They spoke by phone on the morning of August 27 and settled on a model in which cryptocurrency would be converted into dollars in the United States, with the proceeds then transferred through conventional banking channels.
After Polygon, Cross River Bank and Engage Nepal agreed to participate, the proposal was discussed with the Nepal government through Finance Minister Wagle.
“Once the government gave its no-objection, a 25-member team at Cross River Bank completed the technical and legal preparations and set up the NepalRelief.org portal within 24 hours,” — Pravesh Rijal, executive vice-president, Cross River Bank.
The central mechanism is known in the financial industry as an “off-ramp”, a system that converts cryptocurrency into traditional money. Cross River Bank and other US financial institutions, including Lead Bank, have infrastructure capable of providing such services.
Without an off-ramp, crypto relief donations would remain in digital assets rather than becoming conventional funds that can be transferred through Nepal’s banking system.
Cross River Bank has publicly supported the initiative, expressing concern for flood survivors, families waiting for news of missing relatives, and rescuers and volunteers working in areas isolated by damaged transport infrastructure.
“Nepal will rise again and rebuild,” Cross River Bank, in a LinkedIn post encouraging donations through stablecoins.
Nailwal has also argued that stablecoins are particularly useful for emergency response because they can move funds rapidly.
“Stablecoins work best when money has to move fast to people who need it. While many others collected donations for Nepal in a more traditional sense, we built a path that leverages blockchain technology that lands as local currency in the government’s relief fund,” — Sandeep Nailwal, founder of the Polygon Foundation.
Other cryptocurrency-related relief efforts have also emerged since the Bhotekoshi floods. Ripple announced on August 29 that it would contribute $300,000 to the response, with World Central Kitchen and Mercy Corps using the funds for food, water and emergency sanitation supplies.
The Solana Foundation and NFT marketplace Mallow separately raised $166,946 in USDC by auctioning nine advertising slots on Solana’s official X account. Solana said the money would be sent to the Nepal government’s relief fund through Engage Nepal. Blockchain for Impact has also pledged $100,000.
The initiative represents an unusual development in Nepal, where cryptocurrency remains prohibited even as the government has pledged to establish a regulatory framework for the sector.
The Rastriya Swatantra Party, which came to power campaigning on transparency and reform, had promised in its election manifesto to create rules governing cryptocurrencies. During the current disaster, however, authorities have allowed a structure in which digital assets are used abroad while conventional currency enters Nepal through regulated banking channels.
Earlier attempts to organise crypto relief donations for Nepal faced legal obstacles because of the country’s restrictions. The latest model avoids that problem by ensuring that cryptocurrency never enters Nepal and is instead converted into dollars through a regulated US financial institution.
The arrangement could provide a potential model for future crypto relief donations in countries where digital currencies are prohibited. Under the approach, cryptocurrency remains outside the recipient country, is converted through a regulated institution, and reaches the country only as conventional currency through established banking networks.
For Nepal, the system offers a way to access international cryptocurrency-backed assistance while maintaining a separation between digital assets and the country’s domestic financial system.
As crypto relief donations continue to emerge following disasters, the Nepal arrangement demonstrates how humanitarian transfers can be structured around existing regulatory restrictions rather than attempting to bypass them.
Copyright © 2025 - The Bit Gazette.
