The Bangladesh Bank has stepped up efforts to attract international digital payment platforms to the country, opening new avenues for freelancers, travellers, and businesses to conduct legitimate cross-border foreign-currency transactions.

Over a 15-day period, the central bank issued three circulars relaxing restrictions on several types of outbound foreign-currency transactions.

Key amongst these is a new regulatory framework introduced on 29 July, which enables domestic banks to partner with global digital payment service providers (DPSPs) to offer foreign-currency accounts, known as Digital Value Accounts (DVAs).

Under the DVA framework, customers will be able to hold and settle funds through digital wallets linked directly to local banks, simplifying cross-border earnings for freelancers and expanding outbound transaction limits beyond the standard annual $12,000 private travel quota.

Central bank sources confirmed that Bangladesh Bank has formally contacted PayPal, one of the world’s largest online payment platforms, regarding a potential market entry.

PayPal responded that it is currently reviewing its internal policies. In tandem, several domestic commercial banks have begun approaching global operators – including PayPal, Google Wallet, Wise, and Payoneer – to explore operational partnerships.

Dollar wallets to benefit both freelancers, payment service providers

A senior Bangladesh Bank official told TBS that the framework targets a massive untapped market.

Whilst over $500 million currently flows through formal channels annually for international services, the central bank estimates the total market opportunity – encompassing informal freelancing earnings and outbound travel – at upwards of $3 billion.

“Altogether, annual outward spending on private, business, and medical travel alone could be around $1.5-$2 billion,” the official noted, adding that expanding the regulatory scope to cover both inward and outward transactions makes the domestic market significantly more attractive to global players.

The policy shift mirrors recent political commitments. Prime Minister Tarique Rahman recently informed Parliament that targeted initiatives were underway to introduce online payment gateways like PayPal to spur IT sector growth and generate large-scale employment.

Addressing outbound travel and medical expenses

The relaxed rules extend beyond freelancing into personal and corporate spending.

Outbound payments covering business operations, educational fees, cross-border digital services, and medical treatments can now be processed via digital wallets, often bypassing traditional card limits.

For example, while private travel remains capped at $12,000 annually, medical allowances of up to $15,000 per instance can now be managed via dollar wallets like PayPal or Payoneer.

This removes the historic reliance on physical foreign cash or traditional credit cards.

A separate circular also permits local tour operators to sell overseas travel packages capped at roughly $3,000 per customer annually, pulling historically informal flows (such as trips to Nepal or Bhutan) back into official channels.

The PayPal question: Internal strategy vs legal hurdles

Industry experts suggest the primary barrier to entry remains strategic rather than regulatory.

AKM Fahim Mashroor, CEO of bdjobs.com and former president of BASIS, recalled that PayPal representatives first visited Bangladesh in 2013 and met then governor Atiur Rahman.

Although Bangladesh Bank addressed several legal concerns following those initial talks, a 2014 internal strategic shift led PayPal to pause expansion in developing markets.

Engagement resumed after 2024, with PayPal delegates visiting again in 2025 ahead of the national election, though progress slowed as the vote approached.

“It is not a legal or policy gap preventing PayPal from entering Bangladesh,” Mashroor explained, noting that PayPal has already held preliminary discussions with local banks.

“There is no major technological limitation on our side. It is primarily an internal strategic decision within PayPal.”

Mashroor added that whilst alternatives like Payoneer are already functioning well, PayPal remains highly sought after by freelancers due to its dominant global market share and buyer protection features, despite its higher fee structure (around 4%).

Banks exploring partnerships

Commercial banks are also beginning to explore the possibilities created by the new regulatory framework.

A senior executive of a leading private commercial bank told TBS that his bank is currently assessing what kinds of products and partnerships could be developed under the new circular.

“At this stage, we are only exploring the scope. We want to understand how we can initiate discussions under the new circular: what products can be introduced and what kind of arrangements are possible,” he said.

For such arrangements to work, banks would need agreements with PayPal, Google Wallet or other international wallet providers.

“The bigger question is what kind of arrangement the international wallet provider wants to have with us, because many of these companies are not officially operating in Bangladesh yet,” he said.

The partner does not necessarily have to be PayPal. It could be Google Pay, Google Wallet or another fintech platform. Other potential partners include Payoneer and Wise.

But banks will also have to assess the risks associated with each platform.

“Their risk ratings are not all the same. Whether banks will accept all of them is also an issue. We need to consider how safe it is to work with a particular platform,” he said.

Settlement arrangements will also need to be worked out, as there could be several possible settlement structures.

Bangladeshi freelancers already working through Payoneer, PayPal, Wise and similar platforms maintain accounts with those services and accumulate their earnings there. If the dollar-wallet framework becomes operational with international partners, they could potentially bring those funds into Bangladesh through formal banking channels.