Bangladesh is in the research phase. In 2022, minister of finance Mustafa Kamal announced that the Bangladesh Bank would begin researching the feasibility of creating a CBDC. Kamal said the main purpose for considering a CBDC is to “facilitate currency in virtual transactions and to encourage startups and e-commerce businesses.”

Bangladesh earned a 40 out of 100 in Freedom House’s 2023 Freedom in the World report. As Freedom House noted in the report, restrictions on opposing voices, sweeping surveillance, and corruption are major issues in the country. The issuance or adoption of a CBDC in Bangladesh could worsen these issues.

“Journalists and media outlets face many forms of pressure, including frequent lawsuits, harassment, and serious or deadly physical attacks,” according to Freedom House. Worse yet, Freedom House reported that “Throughout 2022, journalists were arrested or physically assaulted for critical reporting on the government… [and dozens] of bloggers remain in hiding or exile.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

Freedom House further reported that “The 2018 Digital Security Act (DSA) allows the government to conduct searches or arrest individuals without a warrant, criminalizes various forms of online speech, and was vehemently opposed by journalists. Forms of artistic expression contained in books, films, and other materials are occasionally banned or censored.” Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default.

“Corruption is widespread [and] anticorruption efforts have been weakened by politicized enforcement and subversion of the judicial process,” according to Freedom House. The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.