Dollarization refers to the use of a foreign currency (usually the US dollar) alongside or in place of a country's own currency.
There are two main types: Official/Full Dollarization (a country formally replaces its own currency with a foreign one, like Ecuador and El Salvador) and Unofficial/Partial Dollarization (a foreign currency is widely used alongside the local currency).
Dollarization typically occurs due to high inflation, severe currency depreciation, or financial instability that erodes trust in the local currency.
Bangladesh is not a dollarized country — the taka is the official currency. However, high demand for dollars in trade and remittances, coupled with recent taka depreciation, has raised concerns about informal dollarization trends.