Prof. Md Masum, PhD
If Bangladesh legalizes digital assets one day, the garment industry should be ready with a model that brings speed without sacrificing control. Here is one.
Today, a Bangladeshi garment exporter cannot accept cryptocurrency. Bangladesh Bank treats crypto dealings as a breach of the Foreign Exchange Regulation Act 1947 and the Money Laundering Prevention Act 2012, and in January 2026 its spokesperson said the regulator was “not taking it positively” for now, while adding that “this decision may change in the future.”
That future is worth preparing for. The world around us is moving. The United States passed its first federal stablecoin law, the GENIUS Act, in July 2025. The European Union’s MiCA regulation now licenses crypto-asset service providers across the bloc. Dollar-backed stablecoins already move billions of dollars a day between businesses. Our largest customers, European and American brands, operate in jurisdictions where regulated digital dollars are becoming ordinary payment tools.
Garment exports earned Bangladesh about USD 38.7 billion in FY2025-26. If digital assets are legalized, the worst outcome would be an unplanned scramble, with factories experimenting through unlicensed channels and regulators chasing them. The better outcome would be a designed system. This column proposes one: a Regulated Stablecoin Export Settlement model, or RSES.
The principle: digital dollars, not speculation
The model rests on a simple distinction. Volatile cryptocurrencies such as Bitcoin are investment assets, not payment tools; a garment order priced in Bitcoin could gain or lose ten percent of its value between shipment and payment. Stablecoins are different. They are digital tokens backed one-for-one by US dollars or euros held in reserve by a regulated issuer.
Under RSES, export contracts would still be priced in US dollars or euros. Only the payment rail would change. Bangladesh Bank would publish a short list of approved stablecoins, issued by regulated issuers in the United States or the EU, that could be accepted as export proceeds in the same way as a dollar wire transfer. Nothing else would qualify.
How the model works
Step one: a digital contract linked to the EXP. The exporter registers the export with its authorised dealer (AD) bank as today. The EXP number becomes a reference embedded in a smart contract, a program on the blockchain that holds the buyer’s payment and releases it automatically when agreed conditions are met.
Step two: the buyer pays into escrow. The foreign buyer pays the invoice value in an approved stablecoin from its own regulated wallet provider. The money sits in escrow, visible to both sides, so the exporter knows the buyer has paid before the goods leave the port.
Step three: documents release the payment. When the exporter uploads the electronic bill of lading and commercial invoice, and an inspection agent confirms them, the escrow releases the funds. This is a digital letter of credit in all but name, settled in minutes instead of days. Electronic trade documents already have legal footing in many countries under the UNCITRAL Model Law on Electronic Transferable Records, and Bangladesh would need to adopt similar rules.
Step four: the payment lands in a Digital Export Account. The stablecoins arrive in the exporter’s Digital Export Account, held in custody by its AD bank or a Bangladesh Bank-licensed virtual asset service provider partnered with it. The exporter never keeps the tokens in a personal wallet. Each transfer carries the sender and recipient information required by the Financial Action Task Force’s “travel rule” for anti-money-laundering checks.
Step five: automatic reporting. Because the EXP reference travels with the payment, the AD bank’s system matches it to the shipment and reports it to Bangladesh Bank in real time. Repatriation deadlines are monitored automatically; overdue export proceeds, a long-standing problem, become visible the day they fall due.
Step six: convert, retain or pay suppliers. The exporter then has three choices within limits set by Bangladesh Bank. It can convert the stablecoins to taka at the interbank rate. It can retain a share, up to the export retention quota, in the Digital Export Account. Or it can use the retained balance to pay foreign suppliers of cotton, yarn, fabric and accessories through a digital back-to-back arrangement on the same rail.
That last option matters for our industry. Bangladesh imports nearly all its cotton and much of its fabric. A system that lets an exporter receive digital dollars from a European buyer and pay a fabric mill in China or Turkey on the same day, with every step recorded, could cut financing costs and working-capital needs for thousands of factories.
What Bangladesh would gain
Speed and cost. Bank wire transfers across correspondent banks can take days and pass through several intermediaries, each taking a fee. Stablecoin settlement takes minutes and typically costs far less, a real gain for small and medium exporters handling sample orders and small shipments.
Security for exporters. Escrow-backed payment gives the protection of a letter of credit without its paperwork and cost, an advantage over open-account terms in which factories ship first and wait for payment.
Transparency for the state. A permanent, traceable record linking each shipment to each payment makes under-invoicing and illegal transfers harder, not easier. Done properly, a regulated digital rail could narrow the space for informal hundi transfers instead of enlarging it.
Access to new buyers. Smaller brands, online retailers and buyers in emerging markets increasingly prefer digital payment. A regulated rail would open these channels without forcing exporters into grey markets.
The safeguards that make it safe
The risks are real, and the model must be built around them.
Only approved stablecoins. No volatile cryptocurrencies in trade settlement, and limits on exposure to any single issuer, so a failure or a loss of the dollar peg cannot sink exporters.
Licensed custody only. All tokens held by licensed custodians with capital requirements, cybersecurity audits and insurance. No personal wallets for export proceeds.
Capital controls preserved. Retention limits, conversion rules and reporting keep Bangladesh Bank in control of foreign exchange. Digital dollars must not become a backdoor to capital flight or to dollarising the domestic economy.
Full anti-money-laundering compliance. Travel-rule data, on-chain transaction screening and reporting to the Bangladesh Financial Intelligence Unit, so the rail is cleaner than the informal channels it replaces.
Legal clarity. Amendments to foreign exchange rules to recognise approved stablecoins as export proceeds; clear rules on eligibility for export cash incentives; and tax treatment set by the National Board of Revenue.
A phased path
The model should not be launched in one step. A sensible path would start with a regulatory sandbox, a controlled trial run under Bangladesh Bank’s supervision with a handful of AD banks, licensed custodians and volunteer exporters, limited to small orders and capped volumes. After two or three years of evidence, the rail could open to all exporters for orders below a set value, and later to back-to-back import payments. Throughout, industry associations such as BGMEA and BKMEA should train members, and universities, including BUTEX, can prepare the finance and compliance professionals the system will need.
Ready before the rules change
Whether and when Bangladesh legalises digital assets is a decision for policymakers, and caution has served the economy well. But regulation tends to follow markets, and our buyers’ markets are already moving. If the door opens, the garment industry should walk through it with a model already designed, one that uses digital dollars as a payment rail, keeps foreign exchange under national control and makes every transaction more traceable than before.
The aim is not to turn garment factories into crypto traders. It is to give them a faster, cheaper, and more transparent way to be paid for the shirts they make.
This column proposes a policy model for discussion. It is not legal or financial advice; cryptocurrency transactions remain prohibited in Bangladesh at the time of writing.
The writer is the former Dean, Faculty of Textile Management & Business Studies, Bangladesh University of Textiles (BUTEX)