Crypto Overview in Bangladesh

Regulatory data is for informational purposes only and may not reflect the most current legal developments. Always consult qualified professionals before making decisions.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Bangladesh maintains one of the strictest positions on cryptocurrency in Asia. No single statute explicitly criminalises ownership, but the combined effect of Bangladesh Bank’s directives and three pieces of legislation makes any cryptocurrency transaction effectively prohibited. Bangladesh Bank has issued three major policy interventions: a warning in 2014 citing anti-money laundering risks, a formal Cautionary Notice on 24 December 2017, and the most comprehensive directive to date, FE Circular No. 24, on 15 September 2022.

The 2022 circular states plainly that virtual currencies are not recognised as “currency” under Section 2(b)(i) of the Foreign Exchange Regulation (FER) Act, 1947, and are not approved foreign exchange or approved forms of transactions under Sections 2(aa) and 2(bb) of the same Act. Dealing in virtual assets constitutes a contravention of Section 5(1)(e) of the FER Act and a cognizable offence under Section 23(1), which carries up to 7 years imprisonment, a fine, or both.

The three-statute framework applied to crypto is: the Foreign Exchange Regulation Act (FERA) 1947, which governs currency transactions and provides the primary enforcement mechanism; the Money Laundering Prevention Act (MLPA) 2012, under which Section 4(2) prescribes 4 to 12 years imprisonment and a fine of up to twice the value of the offending asset; and the Anti-Terrorism Act 2009, which is cited where crypto is linked to funding concerns.

Tax Treatment

The National Board of Revenue (NBR) has issued no dedicated cryptocurrency tax guidance. The Income Tax Ordinance of 1984 theoretically applies to any income derived from financial activity, but without declared transactions there is no mechanism for assessment or collection. Given that crypto transactions are prohibited, no protocol exists for disclosing crypto holdings or reporting gains on tax returns. Professional advice is essential for any individual with cross-border crypto exposure, though the primary regulatory risk remains the prohibition itself rather than any tax liability.

Regulatory Oversight

Bangladesh Bank is the primary authority for all cryptocurrency-related policy. The Bangladesh Financial Intelligence Unit (BFIU), restructured under the MLPA on 25 January 2012, operates as a department of Bangladesh Bank and is responsible for receiving suspicious transaction reports, analysing financial intelligence, and referring cases to law enforcement. The Criminal Investigation Department (CID) of Bangladesh Police is the principal investigator for MLPA offences involving crypto. The Bangladesh Computer Council (BCC) manages technology policy and issued the National Blockchain Strategy in 2020.

Business Environment

Banking Relationships

Bangladesh Bank’s FE Circular No. 24 (2022) was addressed to all scheduled banks, authorised foreign exchange dealers, mobile financial service providers, and other financial institutions. Banks cannot open accounts for crypto-related businesses, process crypto payments, or facilitate any virtual asset transactions. The circular explicitly covers mobile financial services, meaning providers such as bKash and Nagad are equally prohibited from handling crypto-linked transfers. By 2024, over 2,800 bKash and Nagad accounts had been blocked following suspected crypto activity.

Individuals sometimes attempt to circumvent restrictions through peer-to-peer platforms, cash transactions, or foreign-currency cards. These methods carry significant legal risk under the FERA and MLPA, and banks can identify suspicious foreign-currency patterns through standard monitoring.

Innovation Support

The government has maintained a deliberate distinction between blockchain technology and cryptocurrency. The National Blockchain Strategy, published in 2020 under the Bangladesh Computer Council, identifies blockchain applications for land records management, digital identity, e-governance, and supply chain transparency as priorities for the country’s digital transformation agenda. These applications do not involve cryptocurrency tokens or speculative digital assets and remain permissible.

Bangladesh Bank announced a feasibility study for a Central Bank Digital Currency (CBDC) as part of the 2022-23 budget. As of 2025, no pilot programme has been launched and the initiative remains at an early research stage. A March 2024 roundtable hosted by the Policy Research Institute highlighted infrastructure gaps, cybersecurity deficiencies, and digital literacy as barriers to progress.

Crypto License in Bangladesh

Bangladesh offers no licensing pathway for cryptocurrency businesses. There is no regulatory framework under which a crypto exchange, wallet provider, payment processor, or digital asset service provider can legally operate. The absence of a licensing regime is not a gap awaiting regulatory development: it reflects a deliberate policy that cryptocurrency activity should not be permitted. Any person or entity seeking to establish or operate such a business in Bangladesh faces prosecution under existing financial law.

Why No Licensing Framework Exists

Bangladesh Bank’s authority over currency and foreign exchange rests on the Foreign Exchange Regulation Act 1947. Under that Act, the central bank determines what constitutes approved currency and approved transactions. FE Circular No. 24 of 15 September 2022 formally confirmed that virtual currencies fall outside both definitions. Because cryptocurrencies are treated as an unauthorised form of foreign exchange transaction, there is no legal category into which a licensed crypto business could be placed.

Bangladesh Bank has consistently stated that decentralised virtual assets present risks to financial stability, consumer protection, and national security. The BFIU has noted that unregulated virtual currencies are used in cross-border transactions that bypass the foreign exchange monitoring system, which Bangladesh Bank regards as incompatible with its obligations under the FERA. Until the FERA is amended or new primary legislation is enacted, no licensing regime can be created by regulatory directive alone.

The contrast with the CBDC approach is instructive. Bangladesh Bank’s interest in a government-issued digital currency demonstrates openness to digitising payments, provided the instrument remains within the sovereign monetary framework. Decentralised cryptocurrencies, by design, sit outside that framework, which is the core reason for the prohibition.

Activities Prohibited by Default

FE Circular No. 24 prohibits the following without requiring a specific finding of criminal intent: conducting transactions in, from, or to Bangladesh for the purpose of obtaining virtual assets or virtual currencies; providing any facilitation for exchange, transfer, or trading of virtual assets; and operating any business or platform associated with virtual asset services. The circular applies to individuals, corporate entities, and financial institutions. Blockchain applications that do not involve virtual currencies or speculative tokens are not covered by the prohibition.

How Authorities Pursue Crypto Activity

Enforcement combines financial intelligence, banking supervision, and criminal investigation. The BFIU receives suspicious transaction reports from banks and mobile financial service providers and refers cases meeting the threshold under Section 12 of the MLPA 2012 to the CID or other designated agencies. Courts cannot take cognizance of an MLPA offence without BFIU approval, which gives the unit significant control over which cases proceed.

Documented enforcement actions include the arrest of 14 individuals in Dhaka in July 2022 for operating an unlicensed crypto exchange, the seizure of 127 Bitcoin from a trader in February 2023, and the investigation of seven students in Chittagong in May 2024 for facilitating peer-to-peer transactions. In January 2019, six members of the Unipay2u scheme were sentenced to 12 years imprisonment for money laundering connected to a crypto-linked fraud. Penalties under the MLPA can reach 12 years imprisonment and a fine of twice the value of the asset involved.

Market Characteristics

Adoption Patterns

Despite the prohibition, a substantial underground market operates through peer-to-peer platforms and local intermediaries. Tech-savvy users, particularly younger adults, access international exchanges directly and use USDT, Bitcoin, and other assets for investment and cross-border transfers. The remittance sector represents the clearest economic incentive, as Bangladesh receives significant inflows from overseas workers, and some users view crypto as a faster or cheaper channel than authorised remittance services. However, authorised banking and money transfer channels remain the only legal method for receiving funds from abroad.

Institutional adoption is absent. No registered business can openly hold digital assets on a corporate balance sheet or integrate cryptocurrency payments under current law. The underground nature of retail adoption creates consumer protection risks: the country has experienced several high-profile crypto fraud cases, including the MTFE scheme, which reinforced Bangladesh Bank’s position.

Regulatory Evolution

Bangladesh’s regulatory stance has been consistent and has, if anything, hardened since 2014. The 2022 FE Circular represents the most legally precise articulation of the prohibition to date, closing interpretive gaps that existed in the earlier cautionary notices. There is no official indication of planned liberalisation.

Academic and industry observers have argued that sustained underground adoption and global regulatory developments make an eventual policy reassessment likely, but official policy has not shifted. The CBDC feasibility study and the National Blockchain Strategy indicate that the government is not opposed to digital financial infrastructure in principle, though this has not translated into any tolerance for decentralised crypto activity. For any investor or business considering operations connected to Bangladesh, the current environment requires consultation with qualified legal counsel before any engagement with cryptocurrency.