A potential digital taka could put pressure on commercial bank deposits and liquidity if not carefully designed, according to a new Bangladesh Bank working paper that urges a cautious, phased approach before any rollout of a central bank digital currency.
The recently published paper, titled “Central Bank Digital Currency (CBDC): Concepts and Prospects in Bangladesh”, says the impact of CBDC on the banking system would depend heavily on how households and firms shift their money holdings once a digital currency is introduced.
It notes that if users substitute physical cash with CBDC, the effect on banks would be limited. However, the study flags a more sensitive scenario in which households move funds from commercial bank deposits into CBDC wallets.
In that case, the central bank’s liabilities would rise while commercial banks’ deposit liabilities would decline, potentially reducing the supply of reserves in the banking system. If reserve demand remains unchanged, the paper says, the shift “could exert upward pressure on short-term interest rates,” requiring Bangladesh Bank to inject liquidity through its monetary operations to maintain its policy stance.
Even so, the authors stress that outcomes would depend on design features and policy management, and they frame the issue as a scenario analysis rather than a forecast.
More broadly, the working paper takes a measured stance on launching a digital taka. It says Bangladesh “should not go for an immediate plan to issue CBDC due to the strong existence of digital payment systems,” while also noting the country “should not be reluctant on CBDC” given rapid global developments.
The study comes as central banks worldwide accelerate research into sovereign digital currencies. It cites global trackers showing 137 countries and currency unions are now exploring CBDC in some form, reflecting what the authors describe as a structural shift in the future of money.
According to the paper, CBDC’s main appeal lies in its status as a direct liability of the central bank, which would provide a risk-free digital payment instrument compared with private digital money. It also highlights potential efficiency gains in cross-border payments through interoperable CBDC platforms.
At the same time, the report situates the policy debate within the rapid rise of private cryptocurrencies such as Bitcoin, which have raised regulatory and data security concerns for monetary authorities. A regulated CBDC framework, the authors argue, could provide secure and transparent digital transactions under central bank oversight.
Despite these potential benefits, the paper emphasises that Bangladesh already has a strong digital payments ecosystem. Online banking is now available at nearly all commercial bank branches, while mobile financial services (MFSs) have expanded rapidly across the country.
By June 2025, Bangladesh had 145 million mobile money accounts, and active MFS usage reached 78 per cent of the adult population in December 2024. Average daily MFS transactions climbed to Tk49 billion in December 2024 from about Tk11 billion in December 2018, underscoring the deep penetration of existing digital platforms.
Given this backdrop, the authors question what additional value a CBDC would deliver and say a formal cost-benefit analysis is essential before any launch decision. They also warn that infrastructure investment, regulatory adjustments and public readiness must be carefully assessed.
To manage potential risks, the paper stresses the importance of CBDC design choices, including possible holding limits, interoperability safeguards and adjustments to monetary operations so that short-term interest rates remain under control.
Bangladesh Bank, the study suggests, should proceed through a sequenced preparation process. Recommended steps include forming dedicated research and technical teams, reviewing legal and regulatory frameworks and conducting a wide-scale survey of banks, non-banks and the general public to gauge market readiness and perception.
If the groundwork proves favourable, the paper proposes developing a first-generation e-taka prototype and launching a limited pilot in selected areas to gather operational experience. Only after evaluating pilot results should authorities consider broader expansion.
In parallel, the study encourages Bangladesh Bank to explore cross-border CBDC collaboration, particularly in wholesale settlement, and to deepen engagement with international standard-setting bodies.
The overall message of the working paper is cautious but forward looking. Bangladesh’s financial system has already achieved significant digital progress, the authors say, so an immediate CBDC launch is not necessary.
The research was conducted by officials of the Chief Economist’s Unit of Bangladesh Bank. According to the working paper, it was jointly prepared by Md Salim Al Mamun, Director, Md Mokhlesur Rahman, Additional Director, and Raju Ahmed, Joint Director of the central bank.
