Bangladesh and Cryptocurrency
Bangladesh Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology
In 2020, the Government of the People’s Republic of Bangladesh published National Blockchain Strategy: Pathway to be a Blockchain-enabled Nation. The publication recognizes the crucial importance of emerging technologies such as blockchain, providing that:
With the advent of multiple emerging technologies, we are on the verge of an information-driven Fourth Industrial Revolution (4IR). This revolution exposes new challenges as well as exciting opportunities. Only countries with expertise in these emerging technologies can successfully meet the challenges and exploit the opportunities. Blockchain technology is widely regarded as one of the cores and foundational technologies that will be one of the driving forces for the upcoming 4IR. Realizing its potential, many developed, as well as developing countries around the world, have started exploring how blockchain technology can prepare them for future challenges and benefit them to solve many existing complex problems to achieve the Sustainable Development Goals (SDGs) by 2030. This strategy is an effort from the Government of Bangladesh that recognizes the need to explore blockchain technology in order to advance its technical capacity, increase efficiency in e-Governances, and foster innovations. Here, we would like to highlight our extraordinary ambition: to guide Bangladesh into a blockchain-enabled nation. With this vision in mind, this document explores different aspects of this vision with a particular focus on formulating the strategies and different long, mid, and short-term goals to achieve this vision.
Foreign Exchange Regulation Act
Despite this emerging stance, Bangladesh has historically taken a hostile view toward cryptocurrencies. In 2017, the Central Bank of Bangladesh warned that cryptocurrencies are considered illegal in Bangladesh.[1] According to a news report, the notice states that “[t]ransaction [sic] with this currency may cause a violation of the existing money laundering and terrorist financing regulations.”[2] The notice states that bitcoin transactions “are not authorized by the Bangladesh Bank or any regulatory agencies, and do not conform with the provisions under the Foreign Exchange Regulation Act, 1947; Anti-Terrorism Act, 2009; and the Money Laundering Prevention Act, 2012.”[591] The notice further provides that:
[o]nline transaction [sic] of virtual currencies with any unnamed or pseudo named parties may cause a violation of the above-mentioned acts. . . . . [T]ransactions through online networks involving cryptocurrency are not approved by any central payment system and as such people can be financially harmed and may face legal consequences.
Under the circumstances, the citizens have been asked to refrain from performing, assisting, and advertising all kind of transactions through virtual currencies like Bitcoin to avoid financial and legal damages.[3]
P.S. Insights on Cryptocurrency Legal Issues
Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.
Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.
However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.
Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency. The globe below provides links to country-by-country summaries:
Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
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[3] Central Bank of Bangladesh, Cautionary Notice on Bitcoin Transactions, supra note 589 (English translation from the original Bengali provided by Law Library Reference Librarian Shameema Rahman).
