DHAKA (THE DAILY STAR/ASIA NEWS NETWORK) – I recently spent three days in Miami, Florida from April 9-11, attending the 2022 Bitcoin Conference.
As a cryptocurrency enthusiast and supporter of many years, this was a dream come true for me. From investors like Cathie Wood, Peter Thiel and Michael Saylor to politicians like US Senator Cynthia Lummis, there were more than 20,000 attendees from around the world with a common purpose: to discuss the present and future of Bitcoin.
As a Bangladeshi, I was a minority. I felt proud and sad at the same time. While I was lucky to have been able to spend over a thousand dollars to attend the conference and listen to industry experts talk about this cutting-edge technology, people in my home country are not so lucky.
Bitcoin and all cryptocurrencies remain illegal in Bangladesh to date. In March 2020, the Bangladesh ICT Division released a detailed paper on blockchain technology. The document highlighted many advantages of blockchains in different sectors, such as agriculture, trade, finance, and supply chain.
He also touched on how public blockchains like Bitcoin can promote technological innovation. In my opinion, a blockchain without a public network is similar to a computer without an Internet connection. An open, permissionless blockchain with a strong underlying asset like Bitcoin is critical for secure peer-to-peer transactions.
I will highlight some real world examples of how Bitcoin and cryptocurrency adoption can help Bangladesh. The first thing that comes to mind is sending cryptocurrencies.
In 2020 alone, El Salvador received almost US$6 billion in remittances, which represented about 23 percent of its GDP. El Salvador, a nation in Central America, has made Bitcoin its legal tender along with the USD.
However, we need to make Bitcoin legal tender for this to happen. We need open and accessible policies that allow the use of digital assets. Globally, sending remittances costs an average of 6.3 percent of the amount sent.
In 2021, Bangladesh received more than US$22 billion in remittances. Using superior technology, such as the Bitcoin Lightning Network, remittance fees can be reduced to one percent or less. Even if a small percentage of users adopt this technology, a few hundred million dollars could be added directly to Bangladesh’s foreign exchange earnings.
Proceeds would go directly to the families of hard-working migrant workers, who shouldn’t have to waste their hard-earned labor on fees to companies like Western Union.
During the current war between Russia and Ukraine, some key advantages of blockchain technology were demonstrated. While old-world critics argued that Russia could somehow use Bitcoin to trade illegally by circumventing sanctions, it was noted that it is much easier to control the movement of crypto on exchanges than barrels of oil traded in cash.
At the other end of the battlefront, the Ukrainians received donations of more than 60 million US dollars in cryptocurrencies. As Senator Lummis confirmed from her exchanges with the Ukrainians, they would prefer to receive donations in cryptocurrencies rather than US dollars, mainly due to the speed of the transaction.
It takes a few minutes for someone to receive Bitcoin or USD Coin (USDC), as opposed to the four or five business days it takes for a wire transfer to complete. Ukrainians simply cannot afford to wait that long for the money to arrive.
In the event of a natural disaster in Bangladesh, for example, many expats like me will want to help. However, our help may have to wait for days if it is left to the old SWIFT system, while human lives are at risk.
In the US, bipartisan political discussions are taking place regarding future regulations on Bitcoin and cryptocurrencies. El Salvador started a political game theory movement on how countries will adapt and regulate this emerging technology. For the US, Bitcoin is a commodity.
If Bitcoin is indeed a commodity, why does the Bank of Bangladesh have overlapping regulations on how it can be managed? The United States remains the economic center of our planet, mainly due to its adoption of the Internet all those decades ago. According to adoption curves, Bitcoin rivals the Internet. While caution might have been the way to go so far, does Bangladesh really want to fall behind on the tech adoption curve?
As Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, had said in the white paper: “Maybe it makes sense to get something in case it catches on.”
- Tamim Sujat is an electrical engineer based in Toronto, Canada. The Daily Star is a member of the Asia News Network, a media partner of The Straits Times, an alliance of 23 media organisations.