Bangladesh Bank to CID: Trading, owning cryptocurrency not illegal

Owning cryptocurrencies or carrying out virtual transactions and trade through them is not a criminal offence, the Bangladesh Bank recently said in a letter to the Criminal Investigation Department (CID).

The Foreign Monetary Policy Division of the central bank wrote in the letter that cryptocurrency transactions or trade should be deemed as crimes if they involve money laundering or terror financing, a CID source has confirmed.

Even if the ownership, preservation, or transaction of cryptocurrency is not recognized, it does not appear to be a crime, reads the letter sent in May.

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However, transactions in virtual currencies can be listed as crimes under the second phase of the Foreign Exchange Control Act 1947, Anti-Terrorism Act 2009, and the Prevention of Money Laundering Act 2012, the letter adds. 

Speaking to Dhaka Tribune about the matter, Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS), said: “Cryptocurrency is the future. When we want to move towards a cashless society, we cannot be in denial. We have to start preparing to adapt to the implementation of such technology that has the potential to develop several industries.”

He also said skilled human resources need to be developed for reaping the benefits of blockchain technology, as well as a local evaluation of the currency against the Taka. 

There is also a big opportunity for Bangladeshi fintech and software industries if the stance of the legality of cryptocurrencies is made clear and policies are implemented, said a top official of a non-bank financial institution (NBFIs) that has been developing such blockchain-based technology for its clients.

Although several financial institutions such as NBFIs have been actively trying to develop blockchain-based services, the local acceptance of cryptocurrency has been almost non-existent so far.

Bangladesh is one of the few countries in the world that consider bitcoin and all other types of cryptocurrencies as "hostile". 

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Earlier, the central bank issued a warning in December 2016 on their website asking people to refrain from trading in artificial currencies. 

“Transactions in virtual currency may violate anti-money laundering and anti-terrorism financing laws," said the statement.

However, highlighting the importance of the technology, the Bangladesh Bank has taken this new stance stating the value of the current virtual currency market in the world which stands at two trillion US dollars. 

But Bangladesh has yet to formulate any policy to regulate the industry.