<p>Digital Economy is dependent on digital technologies and has a business model delivering goods and other services using digital platform. By streamlining transactions and advancing financial inclusion, this dimension transforms conventional financial services. Nepal’s digital payment system has a significant progress. Recently, the QR code, emerged with the COVID-19 epidemic, has advanced quickly in the digital payment space. At the forefront of this ecosystem are digital entrepreneurship and startups, where innovative minds employ technology to create new products, upend established markets, and promote economic growth. Even though the number of financial transactions conducted online has skyrocketed due to the expansion of internet access, the rise of digital wallets, and online banking, there are still a number of issues that need to be resolved for the nation’s economy to prosper, including implementation of safe and reliable digital infrastructure and policy/regulation. By analyzing and integrating primary data obtained from government institutions and secondary literature from global and regional contexts, this study develops a framework to assess the nation’s preparedness for transitioning into a sustainable digital economy. Through evaluation of digital infrastructure, broadband accessibility, financial inclusion, and regulatory readiness, the study identifies significant progress in mobile and internet banking, QR payments, and mobile wallet usage along with the problems and challenges. After recognizing the difficulties and problems in Nepal’s digital economy, a number of recommendations are provided. These include the necessity for the nation’s digital economy policy to concentrate on integrated digital service platforms that allow citizens to pay for government services through a single payment gateway, the deployment of secure digital infrastructure that creates a secure cyberspace, and the promotion of digital financial literacy among citizens and businesses.</p>