The Qatar Financial Centre (QFC) in Doha has introduced a new framework to regulate digital assets. The rules cover guidelines for tokenization, recognizing property rights in tokens, custody arrangements, and the use of smart contracts.
The QFC operates separately from the rest of Qatar, with its own legal, regulatory, and tax systems. The new framework is designed to ensure a secure and transparent digital asset environment, aligned with international standards.
Qatar Central Bank Governor Sheikh Bandar bin Mohammed bin Saoud Al Thani called these rules a milestone in the country’s “Third Financial Sector Strategy,” aimed at embracing new technologies to boost the financial sector.
The framework was developed with input from 37 local and international organizations in finance, technology, and law. Since the launch of its Digital Assets Lab in October 2023, the QFC has onboarded over 20 startups to test and develop digital asset products and services.
Earlier this year, Qatar completed the infrastructure for its central bank digital currency (CBDC) project and launched the first phase of an experimental project focused on settlements of large payments among major local and international banks.
Few details have been released about the project. The state news agency reported that the initiative will explore distributed ledger technology, artificial intelligence, liquidity, and transactions with securities. The experimental phase will run through October.
Cryptocurrency regulation in Qatar
QCB began studying CBDC technology in March 2022 and confirmed the launch of the project a year ago. At the Qatar Economic Forum in May, QCB governor Sheikh Bandar bin Mohamed bin Saoud al-Thani said, “We are in the foundation stage and evaluating the pros and cons of issuing the CBDC.”
The neighboring United Arab Emirates (UAE) is actively involved in CBDC projects. It was a founding member of the mBridge project along with China, Hong Kong, and Thailand, and has used mBridge for remittance payments to India and wholesale transfers among project members. Additionally, the UAE participated in Project Aber, a CBDC proof-of-concept with Saudi Arabia, which concluded in 2020.
The Qatar Financial Centre Regulatory Authority banned virtual asset services in 2020. In 2023, the Financial Action Task Force criticized Qatar for not enforcing the ban and lacking an understanding of complex forms of money laundering and terrorist financing.
Rumors circulated in March that Qatar’s sovereign wealth fund made a big investment in Bitcoin, spurred by observations of a new wallet accumulating substantial BTC holdings.
Analysts noted a series of daily purchases of 100 BTC, totaling over 50,000 BTC (valued at over $3.3 billion). Dubbed “Mr 100,” speculation abounds regarding the entity behind these acquisitions, with suggestions ranging from Qatar’s sovereign wealth fund diversifying its portfolio to secretive billionaires or banks preparing for ETF launches.
