Does Bangladesh have cryptocurrency?

Bangladesh is one of the few countries in the world that consider bitcoin and all other types of cryptocurrency as "hostile". Bangladesh Bank considers bitcoin and other cryptocurrencies as illegal under the Foreign Exchange Regulation Act, 1947, and the Money Laundering Prevention Act, 2012.

Bitcoin is a cryptocurrency invented in 2009 by a software developer allegedly named Satoshi Nakamoto with a goal to create “a new electronic cash system” that was “completely decentralized with no server or central authority.” The idea, apparently, was to produce a means of exchange, independent of any central authority that could be transferred electronically in a secure, verifiable, and immutable way.

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Bangladesh is one of only 6 countries in the world that are considered “hostile” to bitcoin. Bangladesh Bank issued its first “warning” against the use of Bitcoin in 2014. The warning included caution towards transacting in any artificial currency as this could involve unauthorized actions stated in Foreign Exchange Regulation Act, 1947 and the Money Laundering Prevention Act, 2012. The central bank expressly disapproved any transaction of cryptocurrencies by stating that these virtual currencies were not legal tender issued by any country and it does not depend on and is not approved by a central payment system, as such, people may be financially harmed by it.

The recent global popularity of bitcoin and other cryptocurrencies pushed Bangladesh Bank to issue another “Cautionary Notice” on its website on December 24, 2017. While the recent notice reiterates the laws mentioned in the first notice, it added the Anti-Terrorism Act, 2009 as another law that the use of bitcoin could violate. Moreover, citizens were asked to refrain from performing, assisting, and advertising all kinds of transactions through virtual currencies such as Bitcoin, Ethereum, Ripple, and Litecoin to avoid financial and legal risks.

The 2014 warning by Bangladesh Bank did not get much coverage in the local press but international press and bitcoin forums widely reported that Bangladesh has “banned” bitcoin and warned that bitcoin users may be jailed for up to 12 years.

However, from the two cautionary notices published by the central bank, it is evident that the regulator has fallen short of “banning” or “criminalizing” the use of bitcoin except in cases where it is used to commit an existing offense under the Foreign Exchange Regulation Act, the Anti-Money Laundering Act, and the Anti-Terrorism Act. It could be argued that the use of regular currency to commit crimes under the same Acts would be similarly punishable, and as such while bitcoin itself is not illegal, its use to commit the crime is.