Why Bangladesh could be cashless sooner than you think
The government’s ambitious plan for full digitalization could reduce crime and increase tax revenue. It could also lead to greater innovation in the banking sector.
Bangladesh’s latest budget is a big deal. Global investors already wonder how the debt-plagued nation will pay for a record burst of public spending.
Just two days before prime minister Sheikh Hasina's government unveiled the PRe7.62 trillion ($71 billion) package on June 1, Moody’s Investors Service warned Dhaka about taking on new debt.
The agency downgraded Bangladesh's credit rating to risky – to B1 from Ba3 – citing liquidity shortfalls, a deterioration in foreign currency reserves and intensifying external vulnerabilities.
But there is another reason this budget is a big deal: it unleashes one of the nation’s boldest reforms in years, the creation of the Cashless Bangladesh programme.
I'm excited to see an acceleration of fintech products at scale
In January, the central bank, Bangladesh Bank, detailed government plans to catapult the economy into the digital age. The aim, as its governor, Abdur Rouf Talukder, explained it, is for at least 75% of all retail transactions to be settled via mobile and digital technologies by 2027 – and preferably 100%.
The programme is built around Bangla QR, the uniform digital payment system devised by Talukder’s team.
Talukder argues that going cashless will increase economic efficiency and productivity, boost cost savings for businesses and the government, accelerate financial inclusion, reduce financial crime and swell government tax receipts.