Qatar tests its own central bank cryptocurrency

The Qatar Central Bank (QCB) has 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.

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.

Cryptocurrency regulation in Qatar

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.

The speculation gained traction following a tweet by Bitcoin advocate Max Keiser, hinting at a possible $500 billion investment by the Qatar Investment Authority (QIA) into Bitcoin. Keiser’s tweet ignited a social media frenzy, contributing to a surge in BTC prices. Anthony Scaramucci of Skybridge Capital further fueled the speculation by affirming Keiser’s claims, stating that Qatar may have indeed added BTC to its balance sheet.