Bangladesh Bank Prohibits Exchange Of Virtual Assets Or Currencies1 min read
Bangladesh Bank recently reiterated in its latest circular that investment or transactions through virtual currencies are prohibited in Bangladesh. The circular dated on September 15,2022 states that Bangladesh bank does not recognize virtual currencies as “currency” under Foreign Exchange Regulation (FER),1947. Hence it will be against the FER Act, 1947 [Section- 2(aa) and 2(bb)] to use virtual currencies as an alternative form of foreign exchange/currency or as an investment class.
According to the central bank, virtual currencies or assets have no financial claim embedded and are neither issued by any sovereign nor guaranteed by any jurisdiction. Thus, the value of the assets or currencies is highly volatile with huge financial risks.
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The Financial Action Task Force (FATF) has defined virtual assets as a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes. It is to be noted that digital representations of fiat currencies (Like Taka, and USD) do not fall under the virtual currency definition of Bangladesh Bank.
The central bank prohibits the purchase of virtual assets or maintenance of accounts in cryptocurrencies with the retention of export proceeds abroad. Any transactions to obtain virtual assets (or its subset virtual currencies) in/from/to Bangladesh are not permitted by Bangladesh Bank. Financial Institutions are prohibited to provide facilitation to any business which is associated with the exchange/transfer/trading of virtual assets or virtual currencies.
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