Remittances and Crypto Use in Bangladesh: Why Crypto Is Banned and How Formal Channels Are Winning

Remittances in Bangladesh Are at an All-Time High - But Crypto Is Still Illegal

In 2025, Bangladesh received $30 billion in remittances - the most ever in its history. That’s more than the country made from exporting ready-made garments. Millions of Bangladeshi workers abroad - in Saudi Arabia, the UAE, Malaysia, and the U.S. - are sending money home, and for the first time, nearly all of it is flowing through official banks and mobile apps like bKash and Nagad. This isn’t just good news for families. It’s stabilizing the national economy, boosting foreign reserves to $25.6 billion, and turning a $4.3 billion deficit into a $3.3 billion surplus.

But here’s the twist: while remittances are booming, using Bitcoin, Ethereum, or any other cryptocurrency to send money to Bangladesh is still a criminal offense. The central bank, Bangladesh Bank, has banned crypto for remittances since 2017. And in September 2025, they issued a new warning: any company caught helping people send crypto to Bangladesh faces license revocation and possible jail time.

Why Did Remittances Surge So Fast?

The jump from $23.7 billion in FY2024 to $30 billion in FY2025 didn’t happen by accident. Three things changed:

1. Exchange rates got fairer. Before, the official exchange rate didn’t match what people actually got in the market. Now, banks offer rates close to the open market, so workers don’t lose 10% just to send money home.
2. The hundi network collapsed. Hundi was the old, informal system - cash handed off through middlemen, no paper trail. It was fast, but risky. After political changes in 2024, enforcement cracked down hard. Workers who used hundi started switching to banks because the new system became faster and safer.
3. Mobile money took over. bKash and Nagad now handle 87% of all remittances. A worker in Dubai can send $500 via an app, and the family in Sylhet gets it in under 12 hours. No paperwork. No waiting days.

The result? Remittance processing time dropped from 3 days to under 4 hours for most transactions. The central bank’s systems now run 98.7% of the time - almost flawless.

Why Can’t People Use Crypto Instead?

It’s a fair question. In India and Pakistan, crypto remittances are being tested. In Nigeria, people use USDT to bypass currency controls. Why not Bangladesh?

The central bank’s answer is simple: too risky.

Crypto is anonymous. It moves fast. It can’t be tracked. Bangladesh Bank fears that if crypto became legal for remittances, it could:

• Undermine control over the taka (Bangladesh’s currency)
• Enable money laundering and tax evasion
• Let criminals hide money from regulators
• Trigger capital flight - people moving savings out of the country

Deputy Governor Ahmed Munas said it bluntly in September 2025: “Cryptocurrencies pose unacceptable risks to monetary sovereignty and financial stability.”

They’re not ignoring crypto entirely. Bangladesh Bank is studying Central Bank Digital Currencies (CBDCs) - a government-controlled digital taka. But private crypto? No. Not now. Not soon.

How Much Are People Really Paying to Send Money Home?

Even with all the progress, sending money home still costs too much.

The World Bank says the average fee for sending $200 to Bangladesh is 6.5%. That’s more than double the global target of 3%. In some cases, people pay up to 7% - especially from the UK or the U.S.

Here’s what that means in real terms:

• Send $500? You pay $35 in fees.
• Send $1,000? You pay $65.

That’s not just money lost. It’s money that could go to school fees, medical bills, or a new roof.

There’s one bright spot: the new “Remittance Direct” app from Bangladesh Bank charges only 3.8% - below the market average. But adoption is still low. Most people stick with bKash, Western Union, or MoneyGram because they know how to use them.

What Do Real People Say?

Reddit and Facebook groups are full of stories.

One user, DhakaDave1987, said: “My brother sent $800 from Dubai using bKash. It arrived in 12 hours. No calls. No forms. Just cash in his account.”

But another, SylhetiAbroad, complained: “I paid 7% to send $1,000 from London. The bank said the rate was 112 taka to the dollar. The next day, the open market rate was 118. I lost $60 just because of the delay.”

And then there’s ChittagongMigrant, who lost $300 in fees and waited 10 days to send $500 from Malaysia. “I thought I was using a reliable service,” he wrote. “Turns out, they lost my paperwork.”

On Facebook, a group of 587,000 Bangladeshi expats found that 63% are frustrated with the system. But only 12% have tried crypto - and most of them quit after hearing about the legal risks.

Who’s Winning in the Remittance Game?

It’s not just the banks. It’s the apps.

Here’s who controls the market as of Q3 2025:

bKash and Nagad are winning because they’re fast, cheap, and easy. You don’t need a bank account. You just need a phone and a National ID. The app works even on basic Android phones.

But here’s the catch: 18% of rural recipients still can’t access digital services. They need someone to go to a bank or agent for them. That’s a problem Bangladesh Bank hasn’t solved yet.

What’s Next for Bangladesh’s Remittance System?

The government has big plans:

• 95% digital remittances by 2027 - no more paper forms.
• Integration with India’s UPI - by mid-2026, workers in India can send money directly to Bangladeshi phones.
• CBDC pilot - a government digital taka is being tested, but it’s not for crypto.

But experts warn: growth might stall. Dr. Birupaksha Paul from Jadavpur University says, “Without lowering fees and reaching the last mile, remittances could plateau at $33-35 billion.”

And crypto? Don’t expect a change anytime soon. Even as global markets move toward digital assets, Bangladesh Bank’s message is clear: “Crypto has no place in Bangladesh’s remittance ecosystem for the foreseeable future.”

Why This Matters Beyond Bangladesh

Bangladesh is proving something important: you don’t need crypto to fix remittances.

You need:

• Good exchange rates
• Fast, mobile-first systems
• Strong enforcement against illegal channels
• Trust in the system

Other countries with high remittance flows - like the Philippines, Egypt, and Mexico - are watching closely. If Bangladesh can bring fees down to 3% while keeping crypto out, it could become a global model for how to do remittances right - without the chaos of unregulated digital currencies.

For now, the answer isn’t Bitcoin. It’s bKash. It’s Nagad. It’s a phone, a National ID, and a government that finally got its act together.