The Central Bank of Qatar has unveiled the plans to introduce a new CBDC. The government officials have stated that CBDC is part of the development strategy of the Arabic nation. On this account, the Qatari Central Bank (QCB) has laid the foundational design for the CBDC project.
At the same time, the officials have also confirmed that the project has completed the first test phase successfully. The QCB has also reported that the project is directed towards offering a solution for large-scale transactions between local and international banking firms.
Features of CBDC
Among more details released about the CBDC project has shed light on various aspects such as DLT, AI, liquidity improvement, security transactions and more innovative features.
The QCB has noted that the project is going to complete the next phase, until October this year. QCB reportedly started a research initiative on CBDC back in March 2022. The Central Bank verified that the project has been in the works since June of the same year.
As per a press release, QCB governor Sheikh Mohammad bin Saoud al-Thani has stated while attending the Qatar Economic Forum in May that the CBDC project was in the development stage and the officials were working on determining its advantages and limitations at the time.
CBDC Project mBridge
In terms of CBDC development, United Arab Emirates was among the nations that laid the foundation of mBridge project. The nation was working in tandem with their neighboring nations in the Asian namely China, Thailand, and Hong Kong.
Since that time, UAE has already utilized mBridge to make remittance payments to various nations such as India and the nation has also reportedly used the same network to process wholesale transactions among mBridge member nations.
The UAE government also partook in a proof-of-concept project based on CBDC named Aber in partnership with Saudi Arabia. However, this project was concluded in 2020.
Prior to the launch of CBDC, QCB also undertook a new fintech initiative known as the Express Sandbox. This project was directed towards limiting the testing duration, increase testing permutations, and standardizes the quality control and back-checking procedures.
The officials at UAE also described sandbox as an integral part of the national development plan alongside the CBDC venture. However, the officials have, thus far, refrained from naming the CBDC initiative among the national development strategies in a distinct manner.
Qatar Financial Center Regulatory Authority, which regulates the business development sector within the nation, has also imposed a ban on virtual asset services since 2020.
Qatar’s Response Towards Crypto
The Financial Action Task Force (FATF) has issued a strict criticism on Qatar last year regarding not using stringent methods for enforcing the crypto ban and using complex strategies as a way to control money laundering and terror financing efforts using virtual currencies.
Meanwhile, there are also rumors among cryptocurrency investors about a probable significant investment in Bitcoin by the Qatar Investment Authority.
However, thus far, there is limited evidence or movement from the national financial agency to support this assertion. Another report covering the Qatar Web Summit organized 28th February 2024 quoted remarks from Golden Gate Ventures and Plus Venture heads.
The executives noticed that the VC are not looking for projects with a massive success rate but rather startups that have the ability to overcome challenges, risks, and stagnation.
Further commenting on the matter, Michael Lint noted that sideway performance often misled companies into thinking that they are not in trouble. However, VCs and investors need to communicate at the correct time that while these firms are performing, they are not outperforming.
Both executives used the term zombie phase as a definitive distinction with successful and failed projects while in conversation with Cointelegraph editor attending the fintech event in Qatar at the time.
