Crypto Crossroads: Bangladesh Grapples with Rising Digital Currency Adoption and Money Laundering Risks

The rapid global expansion of cryptocurrencies is opening new horizons for technology-driven economies. However, in Bangladesh, where the buying, selling, and use of virtual currencies remain legally prohibited, growing access to cryptocurrencies through online banking and digital payment channels has sparked renewed concerns over potential money laundering. Experts warn that the largely unregulated nature of the market could facilitate the illicit transfer of thousands of crores of taka abroad every year.

Some technology experts argue that maintaining an outright ban may actually create greater opportunities for misuse.

Arif Moinuddin, cybersecurity expert and author of AI Projuktir Hatekhori (Introduction to AI Technology), said there is no specific legal prohibition against cryptocurrencies themselves, but Bangladesh Bank has restricted their use in financial transactions. Since cryptocurrencies operate through decentralized applications and networks, preventing their exchange is technically difficult.

He noted that cryptocurrencies are legally used for e-commerce and financial transactions in many countries. Therefore, from a technical perspective, completely blocking such transactions is virtually impossible. Instead, he emphasized the need for a regulatory framework. According to him, allowing digital currency transactions through licensed money exchange channels could improve oversight. While complete monitoring may not be possible, transaction data could at least be traced, helping bring greater discipline to the financial sector.

Similarly, Dr. Md. Zulfikar Mahmud, Professor of the Department of Computer Science and Engineering at Jagannath University, believes that technology-driven financial systems cannot be effectively controlled through prohibitions alone. He argued that bringing virtual currencies under a regulated legal framework would increase transparency and reduce money laundering risks. He also pointed out concerns regarding the use of informal channels, including hundi networks, to transfer money abroad.

Virtual currency represents a new chapter in the evolution of money. Unlike conventional paper or metal currencies, cryptocurrencies are entirely digital assets operating through internet-based networks.

The world's first successful cryptocurrency, Bitcoin, emerged in 2009 following the publication of a white paper by Satoshi Nakamoto in 2008. Since then, thousands of digital currencies—including Ethereum and Litecoin—have entered the market.

Built on blockchain technology, these currencies operate outside the control of central banks and state monetary authorities. While this has enabled fast, borderless, and decentralized financial transactions, it has also increased concerns over money laundering, tax evasion, fraud, and other illicit financial activities.

Although Bangladesh Bank has repeatedly warned that cryptocurrency transactions are not legal in Bangladesh, investigations suggest that digital assets can still be purchased within minutes through mobile financial services and online banking channels.

Once a buyer transfers money, digital assets are deposited into a cryptocurrency wallet. However, the identity of the seller, the destination of funds, and the ultimate beneficiaries often remain unknown.

An anonymous user said that virtually anyone can purchase cryptocurrencies in any amount through mobile applications. Some young traders are reportedly earning significant income through cryptocurrency transactions.

Meanwhile, international online trading platforms such as Exness, XM, OANDA, and Capital.com are becoming increasingly popular among Bangladeshi internet users. Some individuals are also participating in global forex markets through platforms such as MetaTrader and TradingView.

As a result, regulators are increasingly concerned about whether such channels are being used to transfer money abroad unlawfully.

According to the 2025 Global Crypto Adoption Index published by Chainalysis, Bangladesh ranks 13th among 151 countries in cryptocurrency adoption.

Despite the country's restrictive stance, Bangladesh has emerged as one of South Asia's leading cryptocurrency markets after India.

Data from Crypto Council for Innovation suggest that Bangladesh is among the world's leading countries in terms of cryptocurrency users. It is estimated that approximately 4.3 million people in the country are involved with cryptocurrencies in some form, although a significant portion of this activity occurs on informal and unregulated platforms.

Law enforcement agencies and the central bank continue to discourage cryptocurrency-related transactions.

On March 30, authorities reportedly recovered digital assets worth more than Tk 44 crore that had been laundered through the fraudulent online investment platform Metaverse Foreign Exchange (MTFE).

Despite ongoing enforcement efforts, interest in cryptocurrencies continues to grow. Analysts attribute this trend to several factors, including remittances, online gaming, and the use of digital assets as a hedge against inflation.

According to Chainalysis, freelancing and remittances have become significant drivers of cryptocurrency adoption. Bangladesh's large population of online freelancers increasingly uses cryptocurrencies—particularly Tether (USDT)—to receive payments from international clients quickly and at lower cost.

There is also growing speculation that a portion of remittance inflows is entering the country through cryptocurrency channels. Additionally, some individuals are converting savings into dollar-denominated digital assets to protect against currency depreciation and inflation.

Because stablecoins and other digital assets can be stored easily on digital platforms, many investors see them as an alternative store of value. Despite regulatory restrictions, a significant number of users continue to access the crypto ecosystem through various payment gateways and digital channels.

Responding to the issue, Arif Hossain Khan, spokesperson for Bangladesh Bank, said that law enforcement agencies and financial intelligence authorities are actively monitoring individuals involved in cryptocurrency-related activities.

He noted that the Bangladesh Financial Intelligence Unit (BFIU) and the Criminal Investigation Department (CID) are maintaining ongoing surveillance in this area.

An e-commerce entrepreneur observed that many countries have already incorporated cryptocurrencies into regulated financial systems through taxation, licensing, and supervisory frameworks. In contrast, Bangladesh continues to rely primarily on prohibitive measures, creating an increasing gap between technological developments and regulatory realities.

Experts conclude that virtual currencies represent both a promising tool for the future digital economy and a potential source of financial crime if left unregulated. Striking the right balance between prohibition, regulation, and technological capability remains one of the most significant challenges facing policymakers today.

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