Bangladesh Ranks 13th in Global Crypto Adoption — Despite a Ban
There is a striking paradox at the centre of Bangladesh's relationship with cryptocurrency. The country officially prohibits Bitcoin, Ethereum, and all other digital assets. Its central bank has warned since 2014 that crypto transactions may violate anti-money laundering, foreign exchange, and anti-terrorism laws. Its Finance Minister stated in March 2025 that there are "no plans to reconsider the cryptocurrency ban." And yet, according to Chainalysis's 2025 Global Crypto Adoption Index, Bangladesh ranks 13th worldwide for crypto usage. TRM Labs' 2025 Crypto Adoption and Stablecoin Usage Report places it 14th globally. Research estimates approximately 3.1 million Bangladeshis now hold crypto wallets. Sensor Tower data from March 2025 shows between 150,000 and 200,000 active monthly users in Bangladesh on platforms like Binance and KuCoin — apps that remain accessible through the Google Play Store despite having no regulatory approval in the country.
The paradox is not accidental. It is the direct product of a regulatory framework that prohibits cryptocurrency but lacks a specific legislative instrument to criminalise ownership, combined with economic conditions — high inflation, a weakening taka, limited access to foreign currency, a large freelancer population earning in dollars, and one of the world's highest remittance-to-GDP ratios at 6.1 percent — that make crypto not merely attractive but functionally necessary for significant portions of the population. Understanding how Bangladesh arrived at this position requires tracing the history of the country's crypto regulatory stance, the mechanics of underground adoption, and the diverging paths its neighbours are taking — paths that make Bangladesh's policy posture increasingly anomalous.
Bangladesh Bank's Position: A Framework Built on Warnings
Bangladesh Bank's approach to cryptocurrency has been characterised throughout its eleven-year history by a reliance on warnings rather than legislation. The central bank's first statement against Bitcoin was issued in 2014, cautioning that virtual currency transactions could violate the Foreign Exchange Regulation Act of 1947 and the Money Laundering Prevention Act of 2012. A more formal "Cautionary Notice" followed in December 2017, naming Bitcoin, Ethereum, Ripple, and Litecoin by name, adding the Anti-Terrorism Act of 2009 to the list of applicable laws, and asking citizens to "refrain from performing, assisting and advertising all kinds of transactions" in these assets.
A key ambiguity has persisted through this entire period: no Act of Parliament explicitly bans cryptocurrency ownership or trading in Bangladesh. The regulatory framework rests on the central bank's application of existing financial laws to crypto activity. This legal grey zone was illustrated in November 2021 when Bangladesh Bank reportedly told the Criminal Investigation Department (CID) that "trading, owning cryptocurrency is not illegal" in itself — only its use in money laundering or foreign currency violations would trigger prosecution. The government has not resolved this ambiguity in the years since. As of 2025, Bangladesh Bank states that crypto lacks official recognition and is not authorised, while no legislation provides a clear framework for either prohibition or regulation.
In parallel with its restrictive stance on cryptocurrency, the Bangladesh government launched a National Blockchain Strategy in 2020 under the Bangladesh Computer Council — embracing the underlying technology for land records, identity systems, and e-governance while maintaining the prohibition on the asset class built on that technology. Bangladesh Bank began exploring Central Bank Digital Currency (CBDC) concepts in 2022. The government has signalled interest in a regulatory sandbox for fintech innovation. This technological embrace-without-financial-access posture creates a coherent policy contradiction: Bangladesh wants the productivity benefits of distributed ledger technology while blocking citizens from the financial instruments that drive its adoption globally.
How Bangladeshis Navigate the Restriction
The 3.1 million Bangladeshis estimated to hold crypto wallets do not do so through any licensed or regulated domestic infrastructure. There is none. They navigate the restriction through a combination of mechanisms that carry varying degrees of legal exposure and financial risk.
The most common pathway is peer-to-peer trading through local agents — individuals who buy and sell Bitcoin, Ethereum, USDT, and other cryptocurrencies in exchange for Bangladeshi taka, typically charging a spread of 1 to 3 percent. These agents operate outside any regulatory framework, hold no licences, and maintain no records. When transactions go wrong, there is no legal recourse. In June 2024, 23 traders lost $350,000 when one such agent, known locally as "Sohel Rana," vanished after collecting payments. The Bangladesh Financial Intelligence Unit (BFIU) monitors crypto-related financial activity and has been active in investigating cases, but the absence of a legal framework means that victims of agent fraud have no formal mechanism for recovery.
A second pathway involves accessing foreign exchanges — Binance, KuCoin, Coinbase — through VPN services that mask the user's Bangladeshi IP address. Users fund these accounts through mobile banking platforms like bKash and Nagad or through international bank transfers. The exposure here is significant: bank algorithms that detect transfers to known crypto addresses can trigger account freezes. A documented case from 2024 involved a university student in Sylhet who had $15,000 in USDT purchased through an agent — his bank flagged the transfers, police raided his home, he was detained for seventeen days without criminal charges, his electronics were seized, and his name was placed on a financial watchlist, effectively restricting his future banking and employment options. No conviction, but substantial life disruption.
A third pathway — particularly significant for Bangladesh's freelancer community and diaspora — involves stablecoin use for remittances and income receipt. With Bangladesh's foreign reserves under pressure in 2024-2025 and the taka depreciating against the dollar, stablecoins like USDT and USDC function as a de facto dollar-value preservation mechanism. Many technology workers receiving payment from international clients use crypto channels for speed and cost efficiency where formal remittance channels impose delays and fees. This use case is structurally different from speculative trading — it is infrastructure for economic participation — but it is treated identically under the regulatory framework.
The Economic Cost of Prohibition
Bangladesh's crypto prohibition is not cost-free. The costs are distributed across several dimensions that are routinely underweighted in the regulatory calculus.
The most quantifiable cost is tax revenue. Dr. B M Mainul Hossain, a finance professor at the University of Dhaka, estimates Bangladesh loses approximately $150 million annually in potential tax revenue from crypto transactions that occur in the underground market with no fiscal visibility. As of February 2025, NBR Commissioner Md. Moniruzzaman confirmed there are no plans to create a crypto tax system — meaning that Bangladeshis who profit from crypto activity owe taxes in principle under the general Income Tax Ordinance of 1984 but cannot pay them legally in practice, a compliance impossibility that criminalises successful investors while generating no government revenue.
The second cost is innovation capacity. Young entrepreneurs and software developers who want to build blockchain-based applications — smart contracts, DeFi protocols, tokenised asset platforms — face a regulatory environment that is effectively hostile to the entire industry. The result is brain drain into crypto-friendlier jurisdictions: Singapore, Dubai, and increasingly Pakistan and India. BASIS (Bangladesh Association of Software and Information Services) representatives have noted that blockchain is arriving in Bangladesh whether or not the government regulates it — the question is whether Bangladesh captures the economic value of that arrival or watches it migrate elsewhere.
The third cost is consumer protection. An estimated 150,000 to 200,000 monthly active crypto users in Bangladesh operate without any regulatory protection: no licensed exchanges, no KYC requirements imposed by domestic authorities, no dispute resolution mechanisms, no insurance on holdings. The MTFE Ponzi scheme — which defrauded a large number of Bangladeshi investors by presenting itself as a crypto trading platform — was the direct product of an unregulated environment where victims had no way to distinguish legitimate operations from fraud before losing their money.
South Asia's Diverging Paths
The contrast between Bangladesh's position and those of its South Asian neighbours has never been sharper than in 2025, and it is moving in directions that make Bangladesh's continued prohibition increasingly difficult to sustain as policy.
Pakistan, once similarly restrictive, made a decisive pivot. In November 2024, Pakistan legalised cryptocurrency. In March 2025, the government established the Pakistan Crypto Council — appointing Binance co-founder Changpeng Zhao (CZ) as an advisor — and announced plans for a dedicated Pakistan Virtual Assets Regulatory Authority (PVARA) for licensing and supervision. Binance received an AML registration under the PVARA framework and moved toward full Virtual Asset Service Provider certification, meaning Pakistan now has a licensed global exchange operating domestically. Pakistan allocated 2,000 megawatts of electricity for Bitcoin mining and began exploring a national Bitcoin reserve. The Chainalysis 2025 Global Adoption Index ranked Pakistan third worldwide — behind only India and the United States.
India's trajectory is more complex but moving in a clear direction. Cryptocurrency is not legal tender in India, and the Reserve Bank of India remains cautious, but trading is permitted, and India ranked first in the Chainalysis 2025 Global Crypto Adoption Index across every sub-category measured — centralized value, decentralized finance activity, and institutional value. India imposes a 30 percent tax on crypto gains and a 1 percent TDS (tax deducted at source) on transactions, a regime harsh enough to have pushed over 90 percent of Indian crypto trading to offshore platforms. But India has not banned crypto, and a June 2025 government discussion paper on digital asset regulation signals cautious movement toward a more coherent framework.
Sri Lanka drafted a cryptocurrency regulatory framework in late 2024. Nepal maintains a ban similar to Bangladesh's. The regional direction of travel is clear: countries with large young populations, significant remittance flows, and substantial informal economies are moving toward regulation rather than prohibition, recognising that prohibition does not eliminate crypto activity — it merely drives it underground, removes fiscal visibility, and leaves users unprotected.
The Global Context: An Industry Moving Fast
Bangladesh's regulatory inaction takes place against a global backdrop of accelerating institutionalisation and policy normalisation. The approval of spot Bitcoin ETFs in the United States attracted nearly $15 billion in net inflows in the first half of 2025. The EU's Markets in Crypto-Assets (MiCA) regulation came into force in 2024, providing a comprehensive licensing framework for crypto businesses across 27 member states. Asia-Pacific on-chain crypto transaction volume grew 69 percent year-over-year to $2.36 trillion in the twelve months ending June 2025, making it the fastest-growing region globally. Bitcoin remains the dominant entry point for fiat on-ramps globally, attracting over $4.6 trillion in inflows between July 2024 and June 2025.
Stablecoins have become structurally significant in ways that make the Bangladesh Bank's framework increasingly strained. Global stablecoin transaction volume exceeded $4 trillion in the first eight months of 2025 alone — an 83 percent increase on the same period in 2024. Stablecoins now comprise 30 percent of all on-chain crypto transaction volume. For countries like Bangladesh, where dollar-value stability is scarce, stablecoins are not speculative instruments — they are monetary infrastructure. Treating their use as a violation of anti-money laundering laws applies a framework designed for criminal finance to what is, in the majority of cases, straightforward financial self-preservation by ordinary people.
What a Policy Shift Would Require
For Bangladesh to move from prohibition to regulation, several conditions would need to align that have not yet done so. First, political will: the Finance Minister's March 2025 statement signals that the current interim government has not placed crypto policy reform on its agenda. Second, institutional capacity: regulating crypto requires technical expertise in blockchain analytics, exchange oversight, and AML compliance that Bangladesh Bank and the BFIU would need to develop. Third, legislative action: addressing the current grey zone would require either a specific law prohibiting or regulating crypto, rather than relying on the existing financial laws' uncertain application.
The models available for Bangladesh to draw from are well-developed. Pakistan's PVARA framework, India's evolving approach, the UAE's comprehensive virtual asset licensing regime in Dubai, and the EU's MiCA framework all offer regulatory architectures that address AML compliance, consumer protection, and tax capture simultaneously — the core concerns that Bangladesh Bank has consistently cited as justifications for its restrictive stance. The concerns are legitimate. The question is whether prohibition effectively addresses them — and the evidence from Bangladesh's own underground market, now serving over three million users with zero regulatory oversight, suggests it does not.
Bangladesh ranks 13th in the world for crypto adoption despite a decade of official prohibition. That ranking is not an argument for unregulated crypto markets. It is a statement about the limits of prohibition as a policy instrument when demand is structurally driven and the underlying technology is accessible to anyone with a smartphone. The 3.1 million Bangladeshis holding crypto wallets today will continue doing so regardless of the current policy position. The question is whether they do so with the protections that regulation can provide — or without them.
win-tk.org is a wintk publication covering global and regional affairs with a focus on Bangladesh and South Asia.
