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Dr Nasrin Sheely

The global digital economy is evolving at an unprecedented pace, creating new opportunities and challenges for workers, businesses, and regulators alike. Bangladesh, with its rapidly growing community of freelancers and migrant workers, has emerged as one of the world’s most vibrant hubs for digital services and overseas employment. From software development to graphic design, content creation, online consulting, and wage remittances from millions of expatriate workers, Bangladesh is earning valuable foreign exchange by serving clients and employers across the globe. Traditionally, these cross-border incomes – whether from freelancing or migrant wages – have been repatriated through banking channels, money transfer operators, and regulated payment systems. But the emergence of stablecoins, a new class of digital assets pegged to fiat currencies such as US dollar, introduces a technological leap that can reshape how both freelancers and wage earners receive and manage their hard-earned foreign income.

Under the current regulatory framework of central bank of Bangladesh, freelancers are permitted to maintain notional accounts with online payment gateways, digital wallets, international cards, and licensed payment service operators. Wage remitters – Bangladeshi expatriates – need to channel funds through authorized dealers, or mobile financial services in partnership with international correspondents and money transfer operators. The key requirement for both groups is that earnings should ultimately be realized in legal tender such as US dollar or other convertible currencies – and credited to bank or MFS accounts in Bangladesh. This ensures that inflows qualify as export earnings or wage remittances and enter the country’s formal economy. While the system is functional, it is often slowed by intermediary banks, time zone differences, and fees that erode final payouts.

Stablecoins offer a striking alternative. By design, they are digital tokens that maintain a stable value by pegging themselves to traditional currencies. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins are intended to function as a medium of exchange and store of value rather than a speculative asset. Popular stablecoins like USD Coin (USDC), Tether (USDT), and Dai operate on blockchain networks that allow instant transfers at minimal cost. A freelancer in Dhaka or a migrant worker in Singapore can, in principle, receive US-dollar-equivalent stablecoins in seconds, hold them in a digital wallet, and redeem them for fiat currency when convenient. For wage earners, this could mean bypassing traditional remittance corridors, avoiding high service charges, and protecting earnings from sudden currency depreciation during transfer delays.

The process is simple but powerful. A client or employer deposits US dollar into a stablecoin platform, which issues an equivalent amount of a USD-pegged stablecoin to the recipient’s wallet. The recipient may hold, spend, or redeem the tokens. Redemption usually involves converting the stablecoin back to US dollar or another recognized fiat currency and crediting it to a bank account or mobile wallet. The underlying blockchain ensures fast settlement and transparent transaction records, while reputable issuers maintain reserves to back the tokens.

This innovation raises an important regulatory question: does the use of stablecoins for freelance payments or wage remittance align with Bangladesh’s foreign exchange rules? Central bank explicitly prohibits dealings in cryptocurrencies used for speculation or investment. Yet stablecoins differ in a critical respect – they are not independent digital commodities but digital representations of fiat money, redeemable on demand. If a Bangladeshi freelancer or remitter receives stablecoins only as a transmission mechanism and ultimately converts them into recognized foreign currency through licensed intermediaries, the essence of the transaction remains within the legal framework of export earnings or wage remittance.

The contrast between Bangladesh’s current regulation and the stablecoin model is that Bangladesh regulation requires that foreign earnings be settled in recognized fiat currency, repatriated through authorized dealer banks or licensed money service providers, and reported underforeign exchange and AML/CFT standards. Digital wallets and online payment gateways are allowed only if they partner with regulated entities and ensure final settlement in fiat.

Stablecoin model allows instantaneous peer-to-peer transfers of fiat-backed tokens across borders, often outside the SWIFT system. Settlement can be immediate, but conversion to fiat depends on the issuer’s banking partners. Compliance hinges on whether the platform operates under financial supervision and whether redemption flows through regulated banking channels.

In practice, stablecoin platforms resemble global payment service providers more than speculative crypto exchanges. Their role is to digitize fiat for faster settlement rather than create a parallel currency. Central bank’s existing policy for freelancers to maintain accounts with digital wallets and for migrants to send wages via international money transfer partners provides a regulatory opening. If stablecoin platforms partner with licensed financial institutions abroad and ensure transparent reserve management, their use can be interpreted as a legitimate extension of current policy – provided that redemption into fiat and repatriation occur through approved banks.

The potential benefits are considerable. Speed is the most obvious. Stablecoin transfers settle in minutes, compared to days for international wire transfers. Cost is another advantage: fees are typically a fraction of those charged by traditional remittance operators. For migrants sending small amounts, this difference can represent critical savings. Currency protection also matters. Because stablecoins are pegged to strong currencies such as the US dollar, recipients can shield earnings from sudden depreciation of the local currency before conversion.

But challenges remain. Regulatory uncertainty is paramount. Central baanj is yet to issue specific guidance on stablecoin-based payments or remittances. Without clear reporting standards, users risk inadvertently breaching foreign exchange or AML requirements. Reliability of issuers is another concern. Some stablecoins have faced scrutiny over whether their reserves fully back the tokens in circulation. A failure of reserves can expose freelancers and remitters to losses. Finally, conversion still depends on traditional banking relationships. Even if payment is instantaneous, cashing out requires stablecoin platforms to maintain banking partners in jurisdictions with strong financial oversight.

For Bangladesh, the rise of stablecoin-based freelance payments and wage remittances is both an opportunity and a policy challenge. Embracing this technology could lower transaction costs, accelerate inflows, and strengthen foreign exchange reserves. Yet regulators should ensure that these flows remain transparent, traceable, and anchored to the formal financial system. Policymakers can consider issuing explicit guidelines for stablecoin use in cross-border freelancing and remittance, setting standards for platform transparency, and requiring that all stablecoin conversions to fiat be reported through authorized dealers.

Ultimately, stablecoins are not a replacement for fiat money but a bridge to it – a technological layer that enhances the speed and efficiency of international payments while preserving the underlying value of traditional currencies. For Bangladeshi freelancers and migrant workers, they offer the prospect of real-time, low-cost payments and protection against exchange-rate volatility. For the central bank, they present a chance to modernize the foreign exchange framework without sacrificing financial integrity.

The global economy is moving toward a more digital and decentralized financial ecosystem. Bangladesh, with its thriving freelancing sector and vast remittance inflows, is well-positioned to benefit if it strikes the right balance between innovation and regulation. Recognizing the difference between crypto speculation and fiat-backed digital payments is the first step toward unlocking a new era of cross-border earnings – one where stablecoins serve not as a threat to monetary sovereignty but as a powerful ally in the nation’s economic resilience.