Bangladesh's investors are here

Bangladesh's financial system is facing a paradox that is becoming impossible to ignore. While formal capital markets remain sluggish - with a weak equity market and limited retail participation in corporate bonds and mutual funds - a vibrant, digitally active investor base is thriving in informal spaces. Unregulated/prohibited digital assets like cryptocurrency, forex, and other online mobile-based trading platforms have quietly become the new frontier for millions of Bangladeshis, many of them first-time investors.
This disconnect is not just structural. It is generational, involving a conflict between legacy infrastructure and user velocity.
Despite a formal prohibition on cryptocurrencies by Bangladesh Bank, Bangladesh ranks 35th globally in crypto adoption, with over 3.1 million verified users actively trading digital assets. These users are not just tech enthusiasts. They include students, freelancers, and other people who, despite the legal risks, perceive that these prohibited ways offer a degree of access, liquidity, and global relevance that the existing products of the formal system currently lack.
The broader digital landscape tells the same story. Bangladesh now has over 200 million registered mobile financial service (MFS) accounts, with platforms like bKash and Nagad woven into daily life. Smartphone penetration has reached around 62 per cent, representing more than 63 million active devices, while social media users number about 60 million. These are not passive consumers. They are digitally literate, financially curious, and increasingly global in outlook.
Add to that the remittance economy. Bangladesh received a record US$ 30 billion in remittances in FY2024-25, sent by over 13 million non-resident Bangladeshis (NRBs). Many remitters are already experienced with these online investing platforms, and part of this knowledge is being shared and spread across the country alongside the remittance flow, addressing the investment aspirations that our existing system has not been able to fulfil for a long time. Hence, in terms of scale, the base for broad-based financial participation exists - just not where our institutions' current regulatory tools and traditional products are designed to reach.
Bangladesh has made progress. The central bank has strengthened oversight of remittance channels. The Securities and Exchange Commission has modernised listing rules and improved disclosure standards. Fintech innovation is emerging, and digital banking is taking shape. Yet, the pace of regulatory reform and digital product rollout has not matched the velocity of user behaviour - and it is time to realign, not deregulate.
This disconnect is rooted in a fundamental clash of needs concerning capital market participation. Built on legacy infrastructure, the formal system lacks depth and relies heavily on bureaucracy. For the young, digitally-native population-the student or the freelancer-the priority is speed, flexibility, and fractional ownership for their savings. They need platforms that treat a Tk 10 investment with the same ease as Tk 10,000. It is no wonder they gravitate toward global digital platforms and unregulated digital assets which, despite their risks, offer immediate, 24/7 access to markets and a crucial sense of financial empowerment the local system currently struggles to deliver through its existing structure.
As such, for these millions, engaging with the domestic capital market is perceived as complex and less relevant. Consider the student who can easily trade a fraction of a global stock or crypto asset on a Smartphone. This experience feels infinitely more intuitive and relevant than navigating complex, local fund disclosure forms or brokerage account minimums. Or the retail investor who does not need to sign a separate order sheet for each of the 50 trades done in the month.
Their activity is not an act of defiance; it is a pragmatic search for competitive returns and superior user experience. This digitally active cohort is not rogue; they are potential investors whose demand for modern, accessible products is being met entirely outside the formal domestic financial structure.
Sadly, the formal market's cautious approach, while driven by a desire for stability, has inadvertently pushed this vibrant energy outside its boundaries. The system is struggling to engage with its own future investors; it is merely watching them build wealth elsewhere. This resulted in a dual loss: a diminished base for domestic capital formation, and, critically, the absence of any safety net or education for millions operating in high-risk, unregulated spaces. The core issue, then, is not to forbid digital enthusiasm but to re-engineer the local financial product and experience to be as appealing, transparent, and user-friendly as the global alternatives, thereby channelling this latent energy back into the national economy.
The Path Forward: Bangladesh does not need to embrace virtual currencies, forex, and such overnight. Instead, policymakers must acknowledge the informal investor base as real, not rogue. We need inclusion, not barriers- so there is a need to create sandbox environments for regulated fintech and other innovative digital finance solutions. On top, we need to modernise capital-market infrastructure to offer products and experiences competitive with what investors already find in global digital platforms. Importantly, we should educate investors through public campaigns, not just warnings, and evolve regulations from rigid to responsive.
It is not about hype. It is about harnessing latent energy and channelling it into a system that includes rather than excludes - enabling progress by providing comfort, relevance, and convenience to the millions of investors still operating outside the formal fold.

Salim Afzal Shawon, CFA is the Head of Research at BRAC EPL Stock Brokerage Limited, and a former World Bank Group staff.