In 2017, the Central Bank of Bangladesh warned the public that cryptocurrencies are illegal. Bitcoin transactions do not conform with the provisions under the Foreign Exchange Regulation Act (1947), Anti-Terrorism Act (2009), and the Money Laundering Prevention Act (2012). Legal authorities in Bangladesh are quick to clamp down on virtual trading and multiple citizen arrests have already occurred. Despite Bangladesh's prohibition on crypto, Ripple is working towards opening a new remittance corridor between Malaysia and Bangladesh, while the government also announced its plan to conduct a feasibility study to launch their own digital currency.
Bangladesh prohibits all cryptocurrency transactions
The Bangladesh Bank released a circular on December 24, 2017 - that prohibited the trading of virtual currencies. According to the Foreign Exchange Regulation Act (1947), the Money Laundering Prevention Act (2012), and the Anti-Terrorism Act of 2009 - transactions through virtual trade are illegal. The bank stated that parties with false identities can abuse these online transactions, leading to a high risk of money laundering and other criminal activities.
How serious is the penalty for trading cryptocurrencies?
The legal risks are high for offenders, and in January 2022 - two people were arrested for their suspected involvement in trading of cryptocurrencies. The raid was conducted by two branches: the Detective Branch (DB) and the National Security Intelligence (NSI). Sarwar Hossain Dollar and Rakibul Islam Khandaker Rocky were arrested from a village in the northern district of Atrai.
Rakibul was identified as one of the leaders of the Bitcoin trading groups, and was immediately arrested at Chowrabari village. According to officials, the two men did not deny their involvement and were guilty of fraud. Another serious arrest case occurred in 2021, when Hamim Prince Khan, Rahul Sarker, Sanjeeb Dey Titas, and Sohel Khan were arrested from Dhaka’s Darussalam area for Bitcoin trading. The men were charged with using Bitcoin to buy videos from pornographic websites with the intent to sell. Additionally, a spokesperson from the Rapid Action Battalion (RAB) mentioned that they had hacked credit cards in order to buy the Bitcoin.
Ripple opens a new remittance corridor between Malaysia and Bangladesh
Ripple, a blockchain payment enterprise - announced its partnership in 2021 with Mobile Money. This move paves the path for remittance through Bangladesh's largest provider of mobile financial services (MFS). What does this mean for Bangladesh? The release claims that Mobile Money will use RippleNet global payment networks to connect to bKash - Bangladesh's largest provider of mobile financial services.
"We are constantly exploring innovative ways to give simple solutions to our customers. bKash is happy to have partnered with Ripple in collaboration with Mutual Trust Bank of Bangladesh to deliver a cost-effective, fast, transparent and reliable remittance sending experience to more than 10 million non-resident Bangladeshis all over the world."
Kamal Quadir, CEO of bKash
The union will result in effortless wallet-to-wallet payments, bridging a corridor between Bangladesh and Malaysia. Mobile Money and bKash will both gain access to the full suite of Ripplenet features, paired with banking partner Mutual Trust Bank - providing remittance settlement under the guidance of the Bangladesh Bank.
Bangladesh plans a feasibility study to launch its own digital currency
The government of Bangladesh is making plans to conduct a feasibility study to launch their Central Bank Digital Currency (CBDC). This move was announced by AHM Mustafa Kamal, the Finance Minister of Bangladesh - in early June. Kamal cited the potential risks of CBDCs, but mentioned that many countries are still adopting their own digital currencies. He believes that the primary positive factor in favor of CBDCs is the enablement of digital payments that would encourage startups and e-commerce businesses.
Despite Bangladesh's hesitance to join the crypto space, the government does not want to fall behind other modern economies. Their caution towards digital currencies such as Ethereum, Ripple, and Bitcoin has been noted - but they have proven receptive to change.
Bangladesh's tight ban on cryptocurrencies has been in effect since 2017. Arrests were made in the past few years for attempting to buy Bitcoin, credit card hacking, and even selling pornographic material with Bitcoin. Despite this, the government is in the early stages of planning a feasibility study for a Central Bank Digital Currency. Ripple has also announced a new remittance corridor between Malaysia and Bangladesh. The crypto situation in Bangladesh is difficult to predict, but the government's openness towards creating their own digital currency is a silver lining amidst the storm.
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