Bangladesh Bank will conduct a feasibility study on the possibility of introducing a central bank digital currency (CBDC), backed by blockchain technology.
Finance Minister AHM Mustafa Kamal revealed the plan in the proposed budget for the financial year 2022-23 in parliament on Thursday, highlighting the growing risks in the use of virtual currencies, such as cryptocurrency, reports bdnews24.com.
But, he added, many central banks around the world are working to launch digital versions of their currencies as an alternative to cryptocurrencies to facilitate virtual transactions and to encourage startups and e-commerce businesses.
“As a result of the time-befitting steps of the present government, the coverage of the internet and e-commerce in the country has increased tremendously,” Kamal said, emphasising the need for virtual currencies.
The Bangladesh authorities have so far been sceptical about the use of cryptocurrencies, such as bitcoin, ethereum and ripple. A number of people have been arrested for illegal use of cryptocurrencies in crimes.
In July 2021, Bangladesh Bank reiterated its stand on cryptocurrencies and asked everyone to refrain from their transactions and promotions to avoid financial and legal risks.
It said the Foreign Exchange Regulation Act 1947 does not support use of such currencies either and online transactions in these currencies with unnamed people or people with pseudonyms may violate the Money Laundering Prevention Act 2012.
India in February announced the introduction of its CBDC, the digital rupee, in the next fiscal year. CBDC is a legal tender issued by a central bank in a digital form. It is similar to a fiat currency issued in paper and is interchangeable with any other fiat currency.