Key takeaways:
- In addition to initiating the first phase of an experimental project, the QCB has finished building the infrastructure for a CBDC initiative.
- The QCB started researching CBDC technology, and in June of the same year, it announced that it would be starting a project.
In addition to initiating the first phase of an experimental project, the Qatar Central Bank (QCB) has finished building the infrastructure for a central bank digital currency (CBDC) initiative. The QCB will examine big payment settlements between major domestic and foreign banks.
Not many project specifics were made public. Distributed ledger technology, artificial intelligence, improving liquidity, and securities transactions are the main areas of concentration, according to a report from an official news agency. October is when the project will conclude.
In March 2022, the QCB started researching CBDC technology, and in June of the same year, it announced that it would be starting a project.
Press reports state that QCB governor Sheikh Bandar bin Mohamed bin Saoud al-Thani stated the following during the May Qatar Economic Forum:
“We are in the foundation stage and evaluating the pros and cons of issuing the CBDC.”
Along with China, Hong Kong, and Thailand, the nearby United Arab Emirates (UAE) was a founding participant of the mBridge initiative.
It has already used mBridge for wholesale transfers between the mBridge project participants and for remittance payments to India. Along with Saudi Arabia, the UAE participated in Project Aber, a CBDC proof-of-concept that concluded in 2020.
The QCB unveiled a new fintech sandbox one day prior to the CBDC project’s introduction. For qualified participants, the Express Sandbox offers a “reduced testing period, rapid testing cycles, and a streamlined overall evaluation process”
Similar to the recently launched sandbox, the CBDC initiative was presented as a component of official national development strategies, albeit without any specific reference of CBDC in the plans.
In 2020, the Qatar Financial Centre Regulatory Authority, a business development jurisdiction, prohibited virtual asset services from functioning in the nation.
In 2023, Qatar came under fire from the Financial Action Task Force for failing to implement the prohibition and for not having a thorough understanding of more intricate forms of “money laundering and terrorist financing.”
In March, there were rumors in the cryptocurrency world that the Qatar Investment Authority was about to make significant Bitcoin investments, but that is unlikely.
