Qatar is experimenting with digital banks and central bank digital currency

The central bank is anticipated to announce its future course soon, with a special emphasis on several fintech areas.

According to reports, the Qatar Central Bank (QCB) is looking into the idea of introducing a digital currency and providing licences to digital banks.

According to Alanood Abdullah Al Muftah, head of the QCB’s fintech branch, the central bank is anticipated to announce its future focus on a variety of fintech verticals soon.

Al Muftah added that the QCB will also assess Qatar’s eligibility to launch a central bank digital currency (CBDC). She elaborated:

“Each central bank should study digital banks, considering their growing significance in the global market. We also see the direction of the market moving toward having a digital currency. However, it’s still being studied whether we’re having a digital currency or not.”

Al Muftah stated, in response to a question about Qatar’s regulatory sandbox, that three firms in the payments sector are actively testing solutions with the central bank. Additionally, she noted that the QCB is examining the possibility of additional enterprises accessing the regulatory sandbox.

A regulatory sandbox is a controlled environment in which fintech firms can experiment with novel products, services, business models, and delivery mechanisms in a real-world setting while benefiting from an expedited approval process and supervisory oversight.

Meanwhile, Dukhan Bank, a private Qatari bank, is exploring the prospect of establishing a digital firm in Qatar, according to Narayanan Srinivasan, the bank’s chief operations and digital officer. Srinivasan cautioned, though, that his institution would develop a digital bank only after gaining a greater knowledge of its economics. According to the report, Dukhan Bank is also exploring the possibility of using blockchain technology in the payments business.

While private cryptocurrencies such as Bitcoin (BTC) have gained in popularity and followership, government-backed CBDCs, which are typically viewed as the polar opposite of private cryptocurrencies, have accelerated their growth. According to the Atlantic Council, 87 countries were developing their own digital currency as of June 2019, with only 14 having passed the pilot phase. Currently, nine countries have enacted a CBDC.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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