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Cash transactions at banks have gone down by almost half between 2019 and 2022 due to Bangladesh Bank’s initiatives for facilitating cashless payments for traders at the programme, speakers have said.
The speakers came up with the observation at a webinar titled “Transforming Paper Currency to Digital: Taking from and Making of Central Bank Digital Currency,” organised by Institute of Chartered Accountants of Bangladesh (ICAB) on Thursday.
Experts also urged the government to make policy framework for using “digital currency” considering national financial security to adopt global transformation and suggested taking the pilot testing project prepared by Bangladesh Bank and BUET to go forward.
In recent years, the government has taken steps to make all banks, MFS operators and PSP accounts interoperable. Binimoy, an interoperable digital transaction platform will facilitate such transactions through “e-Taka”.
ICAB President Md Moniruzzaman FCA said, “Central Bank Digital Currency (CBDC) had been first rolled out in China. The People’s Bank of China rolled out the digital version of physical yuan (e-Yuan) that prompted both the European Central Bank and the Federal Reserve among other central banks to consider the issuance of their CBDCs.”
“A digital taka can bring many unexpected benefits. For example, parents will be able to track where their children spend money, reducing the misuse of funds. It can be programmed to not be used in certain transactions such as one may not be able to buy illegal drugs or illegal arms using digital money,” he added.
The panel speakers were Mohammad Abdur Razzaque, chairman, the Research and Policy Integration for Development, Maliha M Quadir, founding managing director, Shohoj Ltd, Khondoker Shakhawat Ali, visiting fellow of BRAC Institute of Governance & Development and Mizanur Rahman, consultant, Enterprise Data Integration.
Salehuddin Ahmed, former governor, Bangladesh Bank was present as the programme’s chief guest while Humayun Kabir. FCA, former president, ICAB moderated the session. ICAB President Md Moniruzzaman, FCA, delivered the welcome address and Jamaluddin Ahmed, FCA, former president, ICAB presented the keynote paper.
Jamaluddin Ahmed said CBDC has the potential to transform the informal economy into a formal one.
“Bangladesh has lost $50 billion to trade-related illicit financial flows in six years. Impact analysis of four digital payment measures has shown their impact on the informal economy, including Bangladesh’s trade-related illicit financial outflows, which deepen the dollar shortage and persisting losses due to money laundering,” he added.
He further said, “Banks for International Settlement to continue promoting collaboration between central banks on CBDC research and to further explore technological experiments that could facilitate interoperability and cross-border transactions between domestic CBDCs.”
Mizanur Rahman said, “The government can understand who sends money abroad, or does illegal transition if the digital currency is used here. Besides, it will help to increase the tax net as well.”
