Startups and Bitcoins in Nepal.
First 2300 years of its history Nepal had been a collection of regional kingdoms. King Prithvi Narayan Shah united them in 1768. Nepal had been a monarchy headed by successive dynasties until 2008.
In 1959 King Mahendra adapted the Panchayatsystem, where administrative functions on all level of government are executed by representatives chosen by a pyramid of local, regional and state assemblies.
In 1989 King Birenda dismantled Panchayat and introduced a Parliament. In 1996 the Communist Party of Nepal, guided by Marxist anti-capitalist orthodoxy, started a civil war.
A ceasefire was declared in 2005. In 2008 Nepal became a federal republic. In April of the same year Communists gained a Parliamentary majority, which allowed them to postpone an adaption of the new democratic Constitution until 2015.
Today Nepal is a parliamentary democracy but its economic climate remains strained.Nepal is a low income country, which extensively relies on international aid. More than 70% of population depends on subsistence agriculture. Another sources of budget revenues are textile products export, mountaineering tourism and hydroelectricity.
Nepalese non-industrial economy, its low-income population, underdeveloped infrastructure, high legal and administrative barriers and harsh investment climate have significantly undermined a future potential of the local startups ecosystem. On the positive side, rapidly growing new generation of mobile Internet users provide local tech founders with profit opportunities in niche markets of EduTech, e-jobs and entertainments.
On August 2017 Nepal Rastra Bank — the main regulatory bank of Nepal — announced that cryptocurrencies (including Bitcoin) are illegal in the country. Soon police crackdowns on Nepal’s leading crypto-exchanged followed.
Business Notes for Startups Founders:
- political climate: not friendly;
- economic climate: not friendly;
- regions to focus: locally;
- industries to focus: e-services (tourism), EduTech, e-jobs, entertainments;
- major limitations: bottom low-income consumers (per-capita is under $900), fixed Internet penetration rate is under 20%, high administrative and legal barriers;
- stimulus: GDP growth rate exceeds 7%, large population (over 25 million);
- opportunities: to build an e-business aimed at urban young users of mobile Internet;
- Cryptocurrencies and ICOs: not-legal.