Law No. 194/2020 – Bangladesh’s Crypto Regulation Explained

When working with Law No. 194/2020, the 2020 amendment to Bangladesh’s Foreign Exchange Regulation Act that restricts crypto activities. Also known as Foreign Exchange (Amendment) Act 2020, it gives the government authority to curb unregistered digital asset trades. Bangladesh, a South Asian nation with a fast‑growing fintech sector relies on this law as the legal backbone for its crypto ban. The statute encompasses foreign‑exchange control, mandates reporting of crypto holdings, and triggers penalties for non‑compliance. Because the amendment ties digital‑currency activity directly to the country’s foreign‑exchange framework, cryptocurrency regulation, the set of rules governing digital assets in Bangladesh is tightly linked to this amendment, shaping tax treatment, enforcement actions, and even how banks can engage with blockchain‑related services. Enforcement agencies such as the Bangladesh Bank and the Financial Intelligence Unit regularly issue warnings, and violators can face fines up to 10% of their transaction value or imprisonment for up to five years. This legal environment makes it clear: any crypto‑related business must either obtain a specific exemption or operate entirely outside the country’s jurisdiction.

Key Concepts Tied to the Amendment

The amendment’s reach extends far beyond a simple ban. It requires every crypto exchange to register under the Foreign Exchange Act, Bangladesh’s primary law for cross‑border currency transactions and to report large transfers to the central bank. This creates a direct semantic link: the Foreign Exchange Act provides the procedural framework, while Law No. 194/2020 supplies the enforcement trigger. Because of this connection, financial institutions must integrate robust KYC/AML systems, and users face higher scrutiny when moving funds into or out of crypto wallets. The law also dictates that crypto‑derived income is treated as capital gains under the act, meaning taxpayers must disclose earnings on their annual returns and may be subject to audits if they ignore reporting obligations. In practice, this has led several local fintech firms to pivot toward fiat‑only services or to develop offshore partnerships that can legally process digital‑asset transactions. Compared with neighboring India, which uses a mix of tax‑friendly guidelines and selective bans, Bangladesh’s approach is decidedly more prohibitive, and the legal certainty it provides can deter both legitimate innovators and illicit actors.

Understanding these intertwined rules helps you gauge the real impact of Bangladesh’s crypto stance. Below you’ll find deep‑dive articles that break down the law’s clauses, compare it with regional regulations, and offer practical steps for navigating the landscape. Whether you’re a trader, developer, or regulator, the collection equips you with the insight needed to act wisely under Law No. 194/2020 and related frameworks.