Law to control bitcoin on the cards

Bangladesh Bank is formulating a law to control online transactions in virtual currencies – like bitcoin – and to deal with issues relating to counterfeit currencies.

In a notice in 2017, the central bank said it had received reports from the media, and information, that transactions in cryptocurrencies – like Bitocoin, Ethereum, Ripple and Litecoin – were being conducted on Bangladesh's exchange platforms.

The central bank has incorporated the issue of cryptocurrencies in its draft law as there is widespread discussion about their use in different contexts – including gambling and trade.   

Different countries have imposed restrictions on cryptocurrencies. 

India, Pakistan, Indonesia and Nepal are among the Asian countries to have clamped down on the online payment system. 

Bitcoin is a digital currency that was created in January 2009. It offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralised authority – unlike government-issued currencies.

From regulating counterfeit to digital currency
In the absence of a specific law regarding fake notes prevention, counterfeit currency spread across Bangladesh. 

Bangladesh Bank then took the initiative to formulate a law to combat this in 2011 and took six years to prepare a draft and send it to the finance ministry. 

Another regrettable matter is that the ministry took nearly two years to respond. In November 2019, the finance ministry returned the draft with some queries. 

Md Serajul Islam, executive director and spokesperson of the central bank, told The Business Standard, "We sent a preliminary draft to the finance ministry for its input. The ministry has recently returned it to Bangladesh Bank with a few queries." 

In the draft law, the central bank proposes to punish individuals who counterfeit notes with sentences of between two years to life imprisonment – and a fine of one lakh taka to a crore taka – or both. 

The upcoming law will treat virtual currencies as fake notes and the same punishment as latter mentioned will be applicable to those who use such currencies for transactions in Bangladesh. 

The committee formed to prepare the draft of the Counterfeit Currency (Local or Foreign) Control and Prevention Act, 2019 will meet on Monday at the finance ministry to discuss the draft. 

Currently, currency forgery-related cases are being tried under Penal Code 1860 with sentences of up to life imprisonment.  

The offences are also tried under the Special Powers Act of 1974 with sentences of up to death. 

The central bank says there are various problems in bringing culprits to justice due to the absence of witnesses in such cases. 

The existing law says carriers of counterfeit money are liable for the notes, so, now the central bank is trying to find a way to protect innocent people. 

People are doubly-inconvenienced when they inadvertently receive fake notes. First, they lose the monetary value of the notes and second, they face harassment by law enforcement. 

This is why people are uneager to report fake notes cases to the police. 

Kakoli Prodhan, a female photojournalist, shared her experience with The Business Standard. "Around two years ago, without realising, I received a fake 1,000 taka note from a private bank in Baridhara. As soon as I realized this, I rushed to the bank manager and repeatedly tried to make him understand the situation, but my efforts were in vain."

She said even the bank manager had warned her that she might face trouble if she went to the police; as they initially treat the fake note's bearer as an offender, as described in different laws. 

Special Superintendent of Police (CID) Mostafa Kamal said, "We have a special cell to prevent counterfeiting. After seizing fake notes, we examine the notes. We do not have any difficulty in handling the fake note issue under existing laws." 

The central bank's data showed till September 2019, a total 6,670 fake notes cases are pending throughout the country. The highest amount of such cases have been recorded in Dhaka city and the second-highest in Chattogram city.