The government of Bangladesh is optimistic about expanding digital banking in the country to accelerate financial inclusion with an aim to create more jobs for young jobseekers. According to an official document seen by UNB, the government has stepped in to examine the possibility of “establishing digital banks.” It says if digital banking, which involves high levels of process automation and web-based services, could be expanded new jobs will be created for graduates in information technology. Digital banking provides services mostly through non-physical means such as app-based requesting systems and without printed paperwork, without filling out forms and making transactions through e-wallets. Read more: Towards a cashless society: MFS monthly transactions cross Tk 1.11 lakh crore The government is also considering if Bangladesh Bank can introduce digital currency. Introduction of Central Bank Digital Currency (CDBC) will facilitate currency in virtual transactions and encourage startups and e-commerce businesses, the document says. It is to be noted that establishing digital banks is under either initial implementation or experimental stage in various developed countries and some developing countries in Asia including Singapore, Malaysia and India. It also says that introduction of services like Mobile Financial Services (MFS) and Agent Banking in the country has facilitated financial inclusion. Read more: MFS transforming money transactions in Bangladesh, soon to cross Tk. 1 trillion But, it says, due to lack of interoperability of transactions between MFS service providers, the users of the service did not have the opportunity to perform direct inter-transactions. “To make financial inclusion more dynamic, the government has introduced financial interoperability in the country and fixed nominal fee and charge for inter-transactions,” it says. The government has also formulated the National Financial Inclusion Strategy-Bangladesh (NFIS-B) to establish social cohesion and economic stability by ensuring access to quality financial services for people from all walks of life. Read Bangladesh Bank to flirt with digital currency en route to cashless society Its main objective is to provide a comprehensive framework through which cooperation may be enhanced by coordinating and prioritising the work of all stakeholders involved in financial inclusion activities. The NFIS National Council (NNC) has been formed to implement various programmes under the said strategy. “All these steps will further strengthen the foundation of the financial inclusion process in Bangladesh,” it says. Read HSBC introduces domestic foreign currency transaction through RTGS As the risky use of virtual currencies such as Crypto Currencies continues to grow worldwide, many central banks around the world are working to launch digital versions of their currencies as an alternative to Crypto Currencies. The main purpose of launching Central Bank Digital Currency (CDBC) is to facilitate currency in 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. Read World's 7th largest data centre eyes foreign currency In this context, Bangladesh Bank will conduct a feasibility study on the possibility of introducing digital currency in Bangladesh. The Bangladesh Systemic Risk Dashboard is being made to identify the systemic risks and present the assessment of Bangladesh Bank to the stakeholders on a half-yearly basis. The financial projection model is being implemented to identify potential risks and weaknesses in the financial system. Read Digital Currency: Benefits and Risks of the Cashless Economy in Bangladesh Moreover, an interbank transaction matrix is being implemented to determine the nature, risk, and contagion effect of interbank transactions. Bangladesh Bank has formulated a recovery plan to prepare the banks for digital banking to adapt automatically and efficiently to the situation of severe stress in advance.

Bangladesh Bank (BB) will conduct a study on introducing digital currency and blockchain technology in a bid to boost online payments system of the country. The central bank is also working for a cashless society and touch-free payments. Finance Minister AHM Mustafa Kamal said this in the budget proposed in parliament for the financial year 2022-23. Read: Amid volatile forex market, BB devalues currency by Tk1.60 He said despite growing risk, digital payment and even the use of digital currencies has been increasing in the global arena. In this context many central banks around the world are working to launch digital versions of their currencies as an alternative to crypto currencies to meet the need of virtual transactions and to encourage startups and e-commerce businesses. Bangladesh has made progress in digitalization in various sectors and it is time-befitting steps of introducing digital currencies for the country to meet the requirement, Kamal said.

The modern-day monetary transaction has its roots in the barter system of ancient times. Over the course of thousands of years, physical money has become an integral part of our daily life – until the idea of replacing cash with digital currency was propagated. The idea of replacing cash has been around for a long with cheques and bonds. However, the true idea of replacing cash has not been possible to implement up until recently with the advent of Mobile Financial Services and cryptocurrencies. Let's take a look at how they are impacting the economy of Bangladesh and what are the prospects and risks of a cashless society. What is Digital Currency? Digital currency is a form of currency that is available only in electronic form.  That is, the transactions will take place virtually without any physical interaction. The idea of digital currency was popularized in 2009 after the initiation of Bitcoin by a certain unidentified individual named Satoshi Nakamoto. Harnessing the blockchain mechanism, Bitcoin slowly gained traction and today it is one of the leading cryptocurrencies in the world. The individual Bitcoins and other cryptocurrencies like Ethereum are stored in an e-wallet from which transactions can be made digitally. Currently, more and more organizations are opening up to crypto transactions as it is secure and an effective monetary system against cash-based transactions. Read: Graphic Designer Salaries: How Much Can You Earn from Graphic Design? State of Digital Currency in Bangladesh However, the popularity of cryptocurrency is also a headache for central regulatory authorities like Bangladesh Bank. Cryptocurrencies are decentralized monetary systems meaning they are not regulated by any central bank or government. The valuation of cryptocurrency is solely dependent on the stock market fluctuations. The lack of control over the system makes many central Banks skeptical about its usage as well as long-term implication in the economy. As a result, Bangladesh does not allow the mining or transaction of any form of cryptocurrency. However, with the increasing popularity and adoption of cryptocurrency, we are only putting ourself at disadvantage for not making use of the potential posed by the system. Currently, the market capitalization of Bitcoin alone stands at over a trillion-dollar, several times more than the GDP of Bangladesh. It is to be noted that a large population of Bangladesh is still unbanked. And without the inclusion of people in the banking system, it's nearly impossible to move forward with the idea of a cashless society. So what is the answer of Bangladesh to this? How are we trying to keep with the increasing trend of digital transactions? Read: Online Business: How to Get Started from Home? The answer is Mobile Financial Service. With over 47 million internet users and 165 million mobile subscribers, Bangladesh is rapidly moving into the age of the internet and digitalization. Leading banks tapped into this opportunity to introduce Mobile Financial Services like Bkash, Nagad, and Rocket. The platforms aim to bring micro banking to the unbanked and make a transaction to various sectors a matter of a few taps on phone. Almost all the leading business including government channels now accepts payments through these MFS which is complementing the idea of a digital currency to some degree. Read Small Business Ideas for F-commerce Startups in Bangladesh during Pandemic

Wall Street will be focused on Coinbase Wednesday with the digital currency exchange becoming a publicly traded company. Coinbase is making its initial public offering of stock with cryptocurrency chatter seemingly everywhere, even at the U.S. Federal Reserve. It is being incorporated into the business plans and accepted by major corporations like Tesla, PayPal and Visa. “The Coinbase IPO is potentially a watershed event for the crypto industry and will be something the Street will be laser focused on to gauge investor appetite,’” Wedbush analyst Daniel Ives wrote this week.   There were 43 million verified Coinbase users in 2020, with 2.8 million making transactions monthly. Its revenue more than doubled to $1.14 billion last year and the company swung to a profit of $322.3 million after losing tens of millions in 2019. When Coinbase filed papers with U.S. regulators in February to go public, it said it would do so through a direct listing, which allows insiders and early investors to convert their stakes in the company into publicly traded stock. Shares of Coinbase, which will be traded on the Nasdaq under the ticker “COIN,′ will attract investors who want to get into the cryptocurrency space in addition to, or without buying any coins at all, said Lule Demmissie, president of Ally Invest. “It could also be a less volatile security than the coins themselves,” Demmissie says. Some Wall Street analysts project that Coinbase Global Inc. could be valued at $100 billion, based on private transactions of its shares. This week Nasdaq gave the company a $250 reference price. That would make it one of the top 100 biggest publicly traded U.S. companies that will be far larger than the New York Stock Exchange or Nasdaq. The Coinbase hype went into overdrive last week when the company reported estimates of its first-quarter results, including about $1.8 billion in revenue and net income between $730 million and $800 million. Still, not everyone is convinced. David Trainer, CEO of investment research firm New Constructs, said Coinbase has “little-to-no-chance of meeting the future profit expectations that are baked into its ridiculously high valuation.” Trainer last week put a valuation on Coinbase closer to $18.9 billion, arguing it will face more competition as the cryptocurrency market matures. However Ives, of Wedbush, sees Coinbase as a window into the future. “Coinbase is a foundational piece of the crypto ecosystem and is a barometer for the growing mainstream adoption of Bitcoin and crypto for the coming years,” Ives said.