If you're planning a trip to Bangladesh or about to do business there, you might wonder: Can you just use US dollars (USD) directly, or do you have to convert to Bangladeshi Taka (BDT)? This article pulls together first-hand experience, snippets from regulatory documents, and industry commentary to paint a real-world picture. I’ll walk you through what actually happens when you try to pay with USD, show some process screenshots, and even break down what happens at the border if you try to bring in large sums. I also compare "verified trade" standards internationally to show why Bangladesh’s approach has its quirks and logic. Whether you’re a traveler, an expat, or someone working in cross-border trade, you’ll find practical guidance, regulatory sources, and some candid stories—including my own fumbles at the Dhaka airport currency desk.
Let’s cut to the chase. Officially, Bangladesh’s currency is the Taka (BDT). Every shop, restaurant, and service provider is supposed to accept only BDT for everyday transactions. The Bangladesh Bank (the country’s central bank) explicitly states in its monetary policy that all domestic transactions must be settled in Taka, as per the Foreign Exchange Regulation Act, 1947 (source).
But what about in practice? Well, here’s where things get messy. If you walk into a street market, a local café, or even a mid-range hotel, flashing a $20 bill will just get you blank stares—or, at best, a polite refusal. Most local businesses simply don’t have the facility or legal clearance to accept foreign currency.
In my most recent trip (late 2023), I tried to buy a SIM card at Dhaka airport with USD. The vendor shook his head, pointed to a sign—“Only Taka Accepted”—and sent me to the next counter. There, I got a sobering lesson in exchange rates (the airport rate was almost 3% worse than downtown). Still, changing money was the only way forward.
If you want to see what the process looks like, check out the YouTube walkthrough by travel blogger Nomadic Matt at Dhaka airport’s money exchange. It’s exactly as awkward and slow as it looks on video.
Now, you might wonder: Why not just use your credit card? In upscale hotels and some chain shops, cards work fine (Visa and MasterCard, mostly). But outside big cities or in smaller venues, cash is still king. ATMs are widespread, but you’ll get your money in BDT, and foreign cards can face hefty fees (sometimes $5 or more per withdrawal, plus your bank’s conversion rate).
Bangladesh’s strict currency controls are rooted in its Foreign Exchange Regulation Act and reinforced by Bangladesh Bank’s circulars. The government wants to keep control over currency flows—a classic move for emerging economies to combat money laundering and stabilize the exchange rate. For businesses, accepting USD directly without special government approval is technically illegal (official circulars).
Let me share a story that still makes me cringe. On my first business trip to Dhaka, I thought I was clever bringing $500 in crisp USD bills, assuming I could use them at my hotel and for taxis. The driver at the airport flatly refused my $20, even though I offered extra for the trouble. I ended up waiting in a long line at the airport exchange—then realized I’d left my passport in my bag already loaded in the taxi. The staff wouldn’t break the rule. Result: I had to drag my bag back in, feeling like a rookie.
In a recent Reddit thread, other travelers reported similar confusion. Some did manage to use USD at high-end hotels, but only after paying a poor exchange rate and showing ID. One commenter said, “You can’t even bribe a rickshaw driver with dollars—the guy would rather take half in Taka than deal with foreign bills.”
Not every country is this strict. Here’s a quick comparison of how different countries handle foreign currency in verified trade:
| Country | Currency Law | Legal Basis | Enforcement Agency |
|---|---|---|---|
| Bangladesh | Only BDT legal for domestic transactions; strict controls on FX | Foreign Exchange Regulation Act, 1947 | Bangladesh Bank |
| Singapore | SGD official; USD accepted informally in some tourist spots | Currency Act, 1967 | Monetary Authority of Singapore |
| Cambodia | USD widely accepted alongside KHR, despite law | Law on Banking, 1999 | National Bank of Cambodia |
| USA | USD only; foreign cash not accepted in regular trade | 31 U.S. Code § 5103 | Federal Reserve |
As you can see, Bangladesh is closer to the US than to, say, Cambodia, where USD and the local Riel are interchangeable on the street.
“If Bangladesh allowed free use of USD, the local Taka could lose value rapidly, and there’d be little control over illicit money flows. It’s happened in other emerging markets, and the government wants to avoid that scenario at all costs.”
In short, don’t count on using USD directly for purchases in Bangladesh. The law, the banking system, and even the guy selling bottled water on the street are all lined up against the idea. Your best bet: bring some USD, exchange it for BDT at an official counter (preferably in town, not the airport), and keep your receipts. If you’re worried about rates or security, use your card at major hotels or ATMs—but be prepared for extra fees.
If you’re handling business transactions, always go through a Bangladeshi bank, and make sure your contracts specify conversion terms. For travelers, just accept that you’ll need to deal with Taka, and keep some small notes handy for taxis and snacks.
Final tip: check the Bangladesh Bank site for the latest regulations and exchange rates before you go. Things can change quickly, and enforcement is strict. If you want to read up on how other countries handle “verified trade” and cross-border currency, the World Trade Organization has some excellent backgrounders.
Would I ever try to spend USD at a local food stall in Dhaka again? Not a chance. Some mistakes you only make once.