That the government is mulling switching to a form of digital currency is indeed a step in the right direction towards Bangladesh ultimately becoming a cashless society by the time we reach our middle income aspirations.
There is little doubt that going cashless will lead to greater transparency, accountability, and mobility in financial transactions. And with the continued popularity of mobile financial services, it is all but an inevitability.
While the Covid-19 pandemic brought many economies to a complete halt, Bangladesh has fared better than most, and its adoption of digitization in its service delivery is often touted as one of the primary reasons. This was a direct result of the government’s pledge to transform the country in accordance with its Digital Bangladesh manifesto, which truly democratized the use of the internet across the nation.
However, the proposed plan to adopt a digital currency does leave room for some glaring flaws, one of them being that it would give the central bank far too much oversight in monitoring transactions, which calls to question the matter of privacy.
With the dire state of digital cryptocurrencies around the world, adopting an entirely new form of digital currency is perhaps not the best of ideas. Instead, further investment into ideas such as MFSs -- which still underpin paper money at the root bypassing privacy concerns -- is what is needed.
Such concepts also take into account rural Bangladesh which, despite all the progress we have made as a nation, has yet to fully experience the kind of transformation our cities have undergone.
The administration realizing the value of a cashless society is a good first step; we hope that further services are introduced to transform Bangladesh into a truly digital nation.
