Remittances and Crypto Use in Bangladesh: Why Digital Currencies Are Still Banned

For millions of Bangladeshis working abroad, sending money home isn’t just a transaction-it’s survival. In fiscal year 2025, Bangladesh received a record $30 billion in remittances. That’s more than the country earned from its entire ready-made garment industry. Families in Sylhet, Khulna, and Chittagong rely on these funds to pay for food, school fees, and medical bills. But here’s the catch: even as remittance inflows hit all-time highs, using cryptocurrency to send money home is still illegal.

Why Remittances Are So Big in Bangladesh

Bangladesh’s remittance boom didn’t happen by accident. It’s the result of a deliberate shift in policy. Between 2023 and 2025, the central bank, Bangladesh Bank, cracked down on informal money channels like hundi, a traditional underground system that moved billions outside the official banking network. At the same time, they made formal channels faster and cheaper. Mobile apps like bKash and Nagad now let workers in the UAE, Saudi Arabia, and the U.S. send money directly to a recipient’s phone in under an hour.

By July 2025, remittance inflows hit $2.48 billion in a single month-up nearly 30% from the same month the year before. The first nine months of FY2024-25 brought in $21.77 billion, compared to just $17.07 billion in the same period the year before. That’s not growth. That’s a surge.

Why? Three things: competitive exchange rates, better digital tools, and the collapse of informal networks. The government didn’t just encourage formal remittances-they made the old ways risky and unreliable. And it worked. Foreign exchange reserves jumped to $25.63 billion, helping stabilize the taka and reduce inflation.

The High Cost of Sending Money Home

Even with all this progress, sending money to Bangladesh still costs too much. The average fee is 6.5%, according to the World Bank. That means for every $100 sent, $6.50 disappears in fees. The global target? 3%. Bangladesh is still nearly double that.

Users report mixed experiences. One worker in Dubai told Reddit he sent $500 via bKash and got it credited in 12 hours. Another in the UK said he paid 7% on the same amount, even though the official exchange rate was better. The problem isn’t just the fee-it’s inconsistency. Banks and agents often offer different rates, and some recipients wait days for funds to appear.

There’s a new app, Remittance Direct, launched by Bangladesh Bank in August 2025. It’s cutting fees to 3.8% on average, which is below the market rate. It’s also faster-processing 85% of transfers in under four hours. But adoption is still low. Most users stick with the apps they know, even if they’re expensive.

Why Crypto Is Still Banned

Here’s where things get complicated. While remittance channels are improving, cryptocurrency remains completely off-limits. Since 2017, Bangladesh Bank has banned all crypto transactions under Section 33 of the Foreign Exchange Regulation Act. In September 2025, they issued a new warning: any company caught facilitating crypto remittances faces license revocation and criminal charges.

Why? The central bank says crypto threatens monetary control and financial stability. They argue that digital currencies can’t be tracked, regulated, or taxed. Unlike bank transfers, which leave a paper trail, crypto transactions are anonymous and irreversible. That’s a nightmare for regulators trying to prevent money laundering and terrorist financing.

There’s also a political layer. After the 2024 political transition, the government moved aggressively to bring all financial flows under state control. Informal systems like hundi collapsed. Crypto would be the next informal system-and it’s one they won’t tolerate.

Compare this to neighbors like India and Pakistan. Both have started exploring regulated crypto use for remittances. Bangladesh? Not even close. The governor of Bangladesh Bank said in October 2025: “Cryptocurrency has no place in Bangladesh’s remittance ecosystem for the foreseeable future.”

What People in the Diaspora Think

The ban isn’t popular among expats. A Facebook group with over half a million Bangladeshi expats found that 63% are frustrated with high fees and slow transfers. But only 12% have tried crypto. Why? Fear. They know the risk. Getting caught could mean fines, account freezes, or worse.

Some try to use peer-to-peer crypto platforms, converting Bitcoin or USDT to local currency through unofficial traders. But these deals are risky. Scams are common. One user on Prothom Alo’s forum lost $300 in fees and waited 10 days for a $500 transfer that never arrived. He didn’t use crypto-he used a middleman. But the pain point is the same: the system is broken.

There’s no real alternative. If you want to send money legally, you use bKash, Nagad, or a bank. If you want speed and lower fees, you risk it on the black market. Crypto isn’t an option-it’s a crime.

What’s Next for Remittances in Bangladesh

Bangladesh Bank has a clear roadmap: get 95% of remittances digital by 2027. They’re expanding the Real-Time Gross Settlement system, cutting transfer times from days to hours. They’re also working with India’s UPI system to make sending money from Indian workers easier.

But they’re not planning to touch crypto. Not now. Not next year. The central bank is watching CBDCs-central bank digital currencies-but even those are years away. Their focus is on making the current system better, not replacing it with something uncontrolled.

Experts are divided. Some say the remittance boom is real and sustainable. Others warn it’s fueled by temporary factors: political changes, global labor demand, and a one-time crackdown on hundi. If those fade, growth could stall.

One thing is certain: Bangladesh’s remittance system is now the most efficient in South Asia. It outperforms Pakistan and Nepal. But it’s still expensive, inconsistent, and closed to innovation.

Why This Matters Beyond Bangladesh

Bangladesh’s story isn’t just about money. It’s about control. In a world where crypto promises freedom from banks, Bangladesh chose the opposite path: total state oversight. They didn’t just allow digital payments-they mandated them. And they used regulation, not technology, to force change.

For other developing countries watching this, the lesson is clear: you can modernize remittances without crypto. But you need strong institutions, political will, and public trust. Bangladesh built that. And they’re not giving it up.

For now, if you’re a Bangladeshi worker abroad, your best bet is still bKash, Nagad, or a bank transfer. Crypto might be faster, cheaper, and more private. But in Bangladesh, it’s not worth the risk.