Quick Answer
Cryptocurrency is currently illegal to use or trade in Bangladesh.
- The central bank warns crypto violates anti-money laundering and terrorism financing laws.
- It is not recognized as legal tender or approved for transactions.
Legal Status of Crypto in Bangladesh
The legal status of cryptocurrency in Bangladesh is complex; while officially considered illegal, some sources describe it as a gray area because no specific law explicitly bans its ownership or use. This ambiguity arises because the country's central bank, Bangladesh Bank, has issued strong warnings against crypto, stating that transactions violate existing financial regulations. Authorities apply laws like the Foreign Exchange Regulation Act and the Money Laundering Prevention Act to prohibit crypto activities, with compliance requirements demanding that citizens refrain from all transactions to avoid legal repercussions.
Current Regulations
Bangladesh lacks a specific legal framework for cryptocurrency, but the government maintains a highly restrictive stance. The country's central bank has issued multiple warnings that crypto transactions may violate existing laws, including the Foreign Exchange Regulation Act, 1947, the Money Laundering Prevention Act, 2012, and the Anti-Terrorism Act, 2009. Consequently, Bangladesh Bank has repeatedly asked the public to refrain from trading any virtual currency. While no single law explicitly bans crypto, authorities use these existing financial regulations to prosecute related activities, rendering exchanges and brokers illegal.
Regulatory Authorities
Several regulatory bodies in Bangladesh are involved in overseeing and enforcing the country's strict stance on cryptocurrency.
- Bangladesh Bank: As the central bank, it is the primary authority that has issued multiple warnings against cryptocurrency, stating that such transactions are not authorized and violate existing financial laws. It advises the public to refrain from all crypto activities to avoid legal and financial risks and is exploring a central bank digital currency (CBDC).
- National Board of Revenue (NBR): The NBR is responsible for tax administration and applies the country's general tax laws, like the Income Tax Ordinance of 1984, to cryptocurrency transactions. However, it has not issued a specific framework for taxing crypto, leaving the tax status somewhat unclear.
- Criminal Investigation Department (CID): The CID is an enforcement body responsible for investigating and prosecuting criminal activities associated with cryptocurrency. Its focus is particularly on cases involving money laundering or violations of foreign currency regulations.
- Ministry of Finance: The Ministry of Finance plays a key role in shaping the country's overall financial policies. It has the potential to lead the development of any future crypto laws or regulations concerning digital assets.
- Financial Intelligence Unit (FIU): The FIU is tasked with monitoring the risks of money laundering and terrorist financing associated with cryptocurrencies. It works to ensure that any illicit activities related to digital currencies are detected and addressed.
- Bangladesh Computer Council (BCC): The BCC is responsible for guiding technological development and policy, including the release of the National Blockchain Strategy. This strategy promotes the use of blockchain technology in government sectors but does not regulate cryptocurrencies themselves.
Historical Context
Bangladesh's regulatory journey began in 2014 when its central bank first warned against Bitcoin, citing money laundering risks. This stance hardened in 2017 with a formal declaration making cryptocurrency illegal and a "Cautionary Notice" naming specific coins. A key policy shift occurred in 2020 with the launch of the National Blockchain Strategy, which embraced the technology for government use while keeping cryptocurrencies banned. This has created a dual reality: the official prohibition has stifled a formal crypto market, pushing adoption into a thriving underground market, while the government simultaneously explores blockchain for innovation.
Compliance Requirements for Businesses in Bangladesh
In Bangladesh, the compliance landscape for cryptocurrency is defined by prohibition rather than a framework for legal operation. Government guidance focuses on preventing crypto activities, with the central rule being a complete ban on their use.
- Anti-Money Laundering (AML) and KYC: Specific AML checks and Know Your Customer (KYC) requirements are not outlined because crypto transactions are not permitted. Instead, the central bank warns that virtual currency transactions may violate the Money Laundering Prevention Act, 2012, citing concerns over unregulated and anonymous dealings.
- Mandatory Procedures: The primary directive from Bangladesh Bank is a blanket prohibition. All individuals and entities are instructed to refrain from holding, trading, or assisting in any kind of virtual currency transaction.
- Foreign Exchange Compliance: Cryptocurrencies are not recognized as legal tender under the Foreign Exchange Regulation Act, 1947. Using them to settle any foreign exchange transaction is a direct violation of this act.
Why this matters for Cross-Border Payments
Bangladesh's strict crypto prohibition creates significant hurdles for cross-border payments with neighboring countries like India. Businesses seeking to use digital assets for faster or cheaper B2B transactions and remittances are completely blocked, forcing reliance on traditional banking channels that are often slower and more costly. This introduces major compliance risks and operational pain points, as any company involved in India-Bangladesh trade must ensure its payment flows are entirely free of cryptocurrency to avoid severe penalties under Bangladesh's financial laws.
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Notice: This article is provided for informational purposes only and does not constitute legal advice.
FAQs
What are the specific penalties for trading cryptocurrency in Bangladesh?
Individuals caught trading crypto can face imprisonment and significant fines under the Money Laundering Prevention Act and Foreign Exchange Regulation Act. The severity of the punishment depends on the specifics of the violation, as determined by the courts.
Is cryptocurrency mining legal in Bangladesh?
Crypto mining is not explicitly mentioned in Bangladeshi law but is considered illegal as part of the country's overall ban on virtual currency activities. Authorities would likely prosecute mining under the same financial laws used to prohibit crypto trading and transactions.
Are there any plans to legalize cryptocurrency in Bangladesh soon?
There are currently no official plans to legalize public cryptocurrencies, as the government's focus remains on its restrictive policies. While authorities are exploring a central bank digital currency, this is separate from legalizing assets like Bitcoin or Ethereum for public use.
Sources
- “Bangladesh and Cryptocurrency.” Freeman Law, 2022, freemanlaw.com/cryptocurrency/bangladesh-and-cryptocurrency/.
- Coin World. “Bangladesh's Strict Crypto Stance Persists Despite Underground Adoption.” AInvest, 8 Apr. 2025, www.ainvest.com/news/bangladesh-strict-crypto-stance-persists-underground-adoption-2504/.
- Government of the People’s Republic of Bangladesh. National Blockchain Strategy: Pathway to Be a Blockchain-Enabled Nation. Government of the People’s Republic of Bangladesh, 2020.
- “Is Bitcoin Legal In Bangladesh?” Mahbub & Company, 11 Jan. 2022, mahbub-law.com/is-bitcoin-legal-in-bangladesh/.
- R, Elena. “Crypto Regulations In Bangladesh 2025.” Coinpedia, 27 June 2025, coinpedia.org/cryptocurrency-regulation/crypto-regulations-in-bangladesh-in-2024/.
- “Trading in Cryptocurrency Not Allowed in Bangladesh.” The Daily Star, 15 Sept. 2022, www.thedailystar.net/business/news/trading-cryptocurrency-not-allowed-bangladesh-3120246.
- Tribune Desk. “Bangladesh Bank Reiterates Barring Virtual Currencies.” Dhaka Tribune, 17 Sept. 2022, www.dhakatribune.com/business/banks/2022/09/17/bangladesh-bank-reiterates-barring-virtual-currencies.
