[🇧🇩] Monitoring Bangladesh's Economy

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Regulate, not ban cryptocurrency

Cryptocurrency is banned in Bangladesh, but its usage is booming in the shadow of a legal grey zone and the absence of effective regulatory oversight. Bangladesh ranks 13th among 151 countries worldwide in terms of cryptocurrency usage, according to the Global Crypto Adoption Index 2025, publ

thefinancialexpress.com.bd

Regulate, not ban cryptocurrency

Atiqul Kabir Tuhin
Published :
Jan 08, 2026 01:01
Updated :
Jan 08, 2026 01:01

Cryptocurrency is banned in Bangladesh, but its usage is booming in the shadow of a legal grey zone and the absence of effective regulatory oversight. Bangladesh ranks 13th among 151 countries worldwide in terms of cryptocurrency usage, according to the Global Crypto Adoption Index 2025, published by the international blockchain analytics firm Chainalysis. In the index, India ranks first, the United States second and Pakistan third, followed by Vietnam, Brazil and Nigeria. The index shows that despite the legal prohibition on the use and trading of cryptocurrencies, Bangladesh has emerged as one of the leading crypto-using nations in South Asia, ranking third in the region after India and Pakistan.

According to Investopedia, the growth of cryptocurrency from a speculative investment into a recognised asset class has prompted governments worldwide to develop regulatory frameworks. The United States, Canada, the United Kingdom, South Korea, Japan and many other countries allow crypto to operate within regulated frameworks. The European Union recognises cryptocurrencies as crypto-assets rather than illegal instruments.

In South Asia, India and Pakistan do not recognise crypto as legal tender, yet neither has formally outlawed its possession. India has lifted its ban and is now working toward a regulatory framework, while Pakistan is exploring blockchain and digital asset regulations. Japan, Switzerland and Singapore offer examples of balanced oversight that encourage innovation while attempting to curb misuse, raising questions about whether Bangladesh's blanket ban on its use is sustainable.

In Bangladesh, the absence of formal recognition has not prevented crypto activity. Instead, it has pushed the market into informal and largely unregulated channels, increasing risks related to fraud, security and capital flight. Although the country has made notable progress in digital connectivity and mobile financial services, there remains a lack of crypto-related infrastructure, public awareness and blockchain education.

Bangladesh Bank has repeatedly warned against cryptocurrencies, citing concerns over money laundering, terrorism financing and foreign exchange losses. While no law explicitly criminalises crypto ownership, existing regulations under the Foreign Exchange Regulation Act of 1947 and the Money Laundering Prevention Act of 2012 have been interpreted to prohibit such transactions. However, its usage continues to expand. Industry estimates suggest that millions of Bangladeshis hold accounts on international crypto exchange platforms such as Binance, Coinbase and Crypto.com, even though banks are not permitted to facilitate crypto payments.

Chainalysis identifies freelancing and remittances as key drivers. A large segment of Bangladesh's youth is engaged in online freelancing, and many receive payments from overseas clients in cryptocurrencies, particularly stablecoins such as USDT, because transactions are fast and relatively inexpensive. It is also believed that a portion of expatriate remittances is entering the country through crypto-based channels. At the same time, persistent currency depreciation and inflation have encouraged some users to convert savings into dollar-pegged digital assets. Cryptocurrency has also become a popular payment method for online gaming and international betting sites.

Most crypto activity in Bangladesh takes place through peer-to-peer exchanges. As users cannot directly purchase crypto with bank cards, they rely on local intermediaries listed on platforms such as Binance. Money is transferred in taka via banks or mobile wallets, and cryptocurrency is credited in return. Once received, it can be sent globally within minutes through blockchain networks. At the receiving end, holders may retain the asset, convert it into stablecoins or sell it back through local P2P markets. In effect, this system operates as a technology-driven money transfer network. It is kind of digital version of hundi.

The central bank views cryptocurrency as a threat because it is not issued or controlled by any government or central authority. Moreover, its value is highly volatile, and formal recognition carries the risk of encouraging gullible Bangladeshis to invest in crypto assets and suffer losses, just as many already suffered in the stock market. And then, it carries significant risk for money laundering. A recent investigation by the International Consortium of Investigative Journalists and The New York Times found that at least $28 billion in illicit funds flowed into prominent crypto exchanges, like Binance and OKX over the past two years.

Globally, regulators are also struggling with the misuse of digital assets by criminal networks. Hackers, cybercriminal groups and transnational fraud syndicates routinely exploit crypto platforms to move stolen or extorted funds. These concerns are legitimate. However, daily transactions continue to rise.

Faced with such a quandary, countries are increasingly moving away from imposing outright bans on cryptocurrency. Instead, they are focusing on regulating the points where digital assets intersect with the formal financial system. The intergovernmental Financial Action Task Force (FATF) now requires all countries to regulate Virtual Asset Service Providers (VASPs), including exchanges, peer-to-peer platforms, and wallet services, through strict KYC requirements, transaction reporting and cross-border information sharing.

Regions like the EU, the UK, and the UAE already enforce these rules. The EU's MiCA framework mandates full transparency from exchanges, while the UK requires platforms to freeze suspicious transfers. Even countries in the Gulf - Dubai, Abu Dhabi, and Bahrain - now require crypto businesses to register, maintain capital reserves and follow AML protocols. Meanwhile, rather than moving toward legalisation or prohibition, India has adopted a tax-first approach by imposing 30 per cent tax on gains and a transaction-level tax deduction.

The scale of the crypto use by Bangladeshis already indicates that it is no longer a fringe phenomenon. Ignoring it will not make it disappear. What is needed is acknowledgment, regulation and oversight that address genuine risks without denying economic reality.

To harness the potential of cryptocurrencies while mitigating their risks, Bangladesh could take several steps. First, it should develop a clear regulatory framework that defines legal usage, taxation, and compliance requirements. Public awareness campaigns are also essential to educate citizens about both the benefits and risks of cryptocurrency investments. At the same time, investment in digital infrastructure would help ensure secure and efficient crypto-related transactions. Regulations should prioritise consumer protection, anti-money laundering (AML)/know your customer (KYC) compliance, and innovation. Policymakers, central banks, fintech companies, academia, and civil society can collaborate to shape a strong legal framework for cryptocurrency adoption and prevention of its misuse.​

 

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Alternatives Bangladesh can explore to move away from the debt trap

Last month, at a seminar on the state of the economy, the chairman of the National Board of Revenue said that Bangladesh has "already slipped into a form of debt trap."

www.thedailystar.net

Alternatives Bangladesh can explore to move away from the debt trap

VISUAL: FREEPIK

Last month, at a seminar on the state of the economy, the chairman of the National Board of Revenue said that Bangladesh has "already slipped into a form of debt trap." This alarming statement, echoed by other senior officials, has set the national discourse alight with anxiety. However, before we succumb to the fear of an impending financial crisis, it's important to closely examine the economic assessment and consider whether the narrative of a debt trap is prematurely ruling out the potential for sovereign alternatives.


Let's start with the cold, hard numbers. Yes, our external debt has surged by 42 percent in five years to $104.48 billion. Yes, debt servicing is now the second-largest expense in our national budget, after salaries and pensions. These are serious pressures. However, Bangladesh's debt-to-GDP ratio is within the manageable threshold for an emerging economy.


The true crisis is not the stock of debt, but the anaemic stream of revenue needed to service it. Our tax-to-GDP ratio has collapsed to a perilous 7.7 percent, one of the lowest in the world. Nearly a third of our meagre government income is consumed by debt repayments, starving public investment in health, education, and infrastructure. Furthermore, our external debt now stands at a staggering 192 percent of our export earnings in 2024. Sixteen percent of export earnings is needed just for debt servicing.

This is a liquidity and revenue crisis. The vulnerability stems from a hollowed-out revenue base and also a dangerous dependence on dollar-denominated borrowing. As the taka depreciates, the local currency cost of repaying foreign loans skyrockets, creating a vicious cycle. The solution, therefore, lies not in panic-induced austerity alone, but in a dual strategy: radically strengthening domestic revenue collection and strategically de-risking from the volatile US dollar.


As these debt anxieties peak, the country is deep into a $4.7 billion IMF programme, with the next tranche hanging in the balance. The IMF's prescriptions—fiscal discipline, a market-driven exchange rate, banking reforms—although presented as technocratic necessities, are also classic tools of geopolitical alignment, keeping countries under the Western-dominated Bretton Woods system.

That is why the debt-trap narrative often instils a fear that paralyses sovereign strategic thinking. It ignores the fact that some successful emerging economies, from India to Indonesia, have not chosen one bloc over another but have skillfully navigated a multipolar world to their advantage. While many in the Global South are rapidly constructing a parallel financial infrastructure, Bangladesh is lagging.

In July 2023, Bangladesh and India launched a landmark mechanism to settle bilateral trade in rupees, bypassing the dollar. Yet, this initiative remains underutilised and half-hearted. Contrast this with India and Russia: in December 2025, they reaffirmed their commitment to settling nearly all their $68.7 billion bilateral trade in national currencies. Where is our aggressive push for settlement in local currencies with our largest trade partners?


Nations insulate their foreign exchange reserves through bilateral swap lines. In early 2025, Indonesia and China renewed a massive swap agreement worth RMB 400 billion. Bangladesh has discussed a yuan swap line with China, but it is yet to materialise.

Over 50 countries, including Bangladesh, have expressed interest in joining BRICS, a bloc whose GDP now surpasses that of the G7. One advantage of joining BRICS is having access to alternatives like the BRICS Bridge—a payment messaging system designed to operate independently of SWIFT. Yet, Bangladesh's interest has not translated into a decisive strategy to engage with the New Development Bank.

The path forward requires the courage to look beyond the existing narrative. This can include activating and expanding the rupee-taka mechanism with India and initiating government-to-government negotiations with China, the UAE, and other major partners to establish bilateral local currency settlement frameworks. Each dollar of trade settled in taka or a partner's currency is a dollar of pressure lifted from our reserves.

In addition, Bangladesh should treat currency swaps not as a financial technicality but as a cornerstone of national economic security and pursue a major swap line with China to secure yuan liquidity. We must also explore similar arrangements with other friendly central banks to create a buffer against speculative attacks on the taka. Additionally, we should begin technical engagement to connect our banking system with the BRICS Cross-Border Payments Initiative (BCBPI), while pursuing BRICS membership.

However, external diversification is meaningless without internal accountability. We must end the culture of tax exemptions, digitally integrate the tax net, and aim to double the revenue-to-GDP ratio in five years. Concurrently, we need a war on NPLs that combines fast-track asset recovery tribunals with pragmatic restructuring of viable businesses to unclog the banking system.

Bangladesh has options to pull itself out of the "debt trap narrative," through vigorous domestic resource mobilisation and strategic diversification that can lead to sovereign agency in a multipolar world. The arithmetic is clear, the global examples are there, and the tools are being built by our peers in the Global South. The question is whether we have the political will to reach for the key that has always been in our own hands. The time for a strategic, sovereign pivot is now.

Zakir Kibria is a Bangladeshi writer, policy analyst and entrepreneur based in Kathmandu, Nepal.​

 

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Remittances to be deposited to customers' accounts within 1-2 days

Bangladesh Bank has instructed banks to ensure that expatriate income or remittances received from abroad are credited to customers’ accounts on the same day or on the next working day. Bangladesh Bank issued the directive through a circular on Thursday which is effective immediately. However...

en.prothomalo.com

Remittances to be deposited to customers' accounts within 1-2 days

Staff Correspondent Dhaka
Published: 08 Jan 2026, 16: 04

Bangladesh Bank has instructed banks to ensure that expatriate income or remittances received from abroad are credited to customers’ accounts on the same day or on the next working day.

The central bank on Thursday issued the directive through a circular which is effective immediately. However, banks have been given time until 31 March for full implementation.


Under the new directive, authorised dealer (AD) banks must notify customers via secure electronic means as soon as they receive an inward remittance message (internal expatriate income).

Remittances received during banking hours must be credited on the same working day, while those received after banking hours must be credited on the next working day.

Banks have also been advised to use straight-through processing (STP) or risk-based expedited procedures.

If the necessary information is available, funds may be credited to customer accounts even if some documentation or verification processes remain, with the remaining formalities to be completed later.

In cases where post-credit review is not possible, banks must complete verification before crediting the customer account and settle the transaction within three working days.

The circular emphasises payment tracking and transparency. To this end, banks have been instructed to use a unique end-to-end transaction reference (UETR) to follow the entire process from inward remittance receipt to final credit in the customer account.

Simultaneously, digital foreign currency platforms must be strengthened to eliminate the need for Form C and Form C (ICT) requirements.

A senior official of an international bank operating in Dhaka said, “This will increase trust among correspondent banks and further strengthen Bangladesh’s reputation in the global payment network.”​

 

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Tailwinds may lift economic growth to 5.0pc in FY26

Bangladesh's slow-pace economic growth may be ramped up to 5.0 per cent by tailwinds before this fiscal year ends on June 30, 2026, as estimated by BMI, a unit of Fitch Ratings. "We maintain our growth forecast of 5.0 per cent for FY2025/26," the global ratings agency's unit says in its late

thefinancialexpress.com.bd

Tailwinds may lift economic growth to 5.0pc in FY26

FE Report
Published :
Jan 09, 2026 23:45
Updated :
Jan 09, 2026 23:45

Bangladesh's slow-pace economic growth may be ramped up to 5.0 per cent by tailwinds before this fiscal year ends on June 30, 2026, as estimated by BMI, a unit of Fitch Ratings.

"We maintain our growth forecast of 5.0 per cent for FY2025/26," the global ratings agency's unit says in its latest report for Bangladesh.

This estimate is, however, lower than government's growth target at 5.5 per cent for the fiscal year.

But the agency has identified some downside risks, too, for the economy during the fiscal year under review.

"Risks to our forecasts are tilted to the downside, based on prolonged political unrest posing a greater drag on growth and global trade uncertainty."

The Fitch's unit forecasts private consumption will likely be more resilient in the next few months in Bangladesh, possibly as the country is on the cusp of transition from political turmoil.

While inflation appears to be "sticky to the downside", real wages contracted by a much slower average of 0.7 per cent year on year over January-November 2025 compared to an average contraction of 2.4 per cent y-o-y in 2024.

"The risk here is that unemployment rises aggressively in the coming months, as US tariffs continue to negatively impact the garment industry," it notes.

"Any further upside for spending will be capped by the elevated risk of unrest associated with the upcoming elections," the agency alerts.

"That will also weigh on private investment. Historically, economic growth in Bangladesh has slowed during periods of political unrest."

The American credit-rating agency, however, does not expect the current situation to match the severity of the "July Revolution" yet forecasts "a modest acceleration in growth".

It recounts that GDP growth typically falls during periods of high political unrest

Bangladesh, it says, is facing another key downside risk that lies in the credit sector. Non-performing loans (NPLs) in Bangladesh have been rising at a significant rate, reflecting years of weak credit-risk assessment and lending practices.

The situation is further aggravated by slow and ineffective loan recovery through the judicial system and highlights the growing difficulties that businesses face in servicing their debt.

"Elevated NPL ratios may also discourage banks from extending new credit, which would further constrain investment and weigh on economic growth."​

 

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https://thefinancialexpress.com.bd/trade/industrial-term-loan-disbursement-grows-1186pc-in-q1-fy26

Industrial term loan disbursement grows 11.86pc in Q1 FY26

SAJIBUR RAHMAN
Published :
Jan 11, 2026 11:46
Updated :
Jan 11, 2026 11:46

Industrial term loan disbursement posted significant year-on-year growth in the July-September quarter of fiscal year (FY) 2025-26, reflecting cautious investment appetite amid ongoing economic adjustments, according to Bangladesh Bank (BB) data.

Disbursement of industrial loans stood at Tk 247.71 billion during the period, marking an 11.86 per cent increase from Tk 221.46 billion in the same period of the previous fiscal year. The latest figure also shows a 1.96 per cent quarter-on-quarter rise compared to Tk 242.96 billion disbursed in the April-June quarter of FY25, indicating a gradual pickup in industrial credit flow.

However, loan distribution was notably higher in the October-December quarter of FY25, when banks disbursed Tk 310.82 billion, suggesting that credit momentum softened somewhat at the start of the current fiscal year.

On the recovery front, industrial loan repayments continued to improve, signalling stronger cash flow management by borrowers. Recovery of industrial loans reached Tk 289.22 billion in the July-September quarter of FY26, registering a sharp 41.06 per cent year-on-year increase from Tk 205.05 billion recovered in the corresponding quarter of FY25.

The recovery trend has remained on an upward trajectory over recent quarters.

Banks recovered Tk 271.81 billion in industrial loans during April-June FY25, up 2.82 per cent from Tk 264.36 billion recovered in the January-March quarter of FY25. Recovery peaked at Tk 331.75 billion in the October-December quarter of FY25, BB data showed.

Meanwhile, the outstanding stock of industrial loans stood at Tk 3.99 trillion at the end of the July-September quarter of FY26, underscoring the sector's continued importance in the overall credit portfolio of the banking system.

Bankers and analysts say the combination of moderate disbursement growth and rising recovery indicates a more risk-conscious lending approach by banks, amid concerns over asset quality, high interest rates and subdued private investment.

They also noted that sustained improvement in recovery performance could help ease pressure on banks' balance sheets and create room for fresh lending to productive industrial sectors in the coming quarters.

Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank, said that mismanagement in certain sectors-particularly the recent LPG cylinder crisis-has disrupted market operations, leading to a temporary halt in LPG cylinder sales.

He emphasised the importance of prioritising energy security and maintaining law and order post-election to restore confidence among businesses and consumers.

Despite the current challenges, Mr. Rahman noted that new investments are still being made, albeit slowly, which he views as a positive indicator for the economy, contributing to job creation.

Additionally, he pointed out that some readymade garment (RMG) entrepreneurs are performing well, showing resilience and adaptability in the face of both global and domestic pressures, which is helping sustain export earnings and employment.

He also mentioned that one potential source of term loans could be demand/forced loans that are later restructured. With improvements in law and order and energy security, he believes that industrial lending could gain momentum in the near future, he added.​