Qatar Central Bank explores CBDC and digitized payments

The Qatar Central Bank (QCB) is currently exploring a central bank digital currency (CBDC) and digital bank licensing, a top official said. The Middle Eastern nation is also weighing issuing licenses for digital banks as it seeks to digitize payments.

The Qatar Central Bank intends to soon reveal its direction on CBDCs, Alanood Abdullah Al Muftah, the bank’s head of fintech, said. She told local news outlet The Peninsula that the bank recognizes the need to keep up with digital payments as the world gradually moves away from cash payments.

“The direction will be clearer in the next couple of months. We’re currently trying to study the different aspects and verticals of fintech,” Alanood said, adding:

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

The Qatar central bank is one of several dozen others exploring CBDCs without making any commitment to issuing a digital currency.

Meanwhile, Narayanan Srinivasan, the chief operations and digital officer at Dukhan Bank, revealed that his bank is weighing the possibility of launching a digital bank in Qatar. Srinivasan, however, cautions that his bank will only establish the digital bank when there is a better understanding of the economics behind this.

“We do not want to rush through this. We need to figure out the economics behind it. Unfortunately, there are not too many use cases, either in the form of success or failure, for us to quickly decide that this is something that we can do. We need to figure out how do we actually take this to the market,” he said.

As Qatar explores CBDCs, its Middle Eastern neighbors are already taking huge strides in digital currency and blockchain adoption. Saudi Arabia is taking the lead, and during the recent LEAP 2022 event, blockchain was among the key topics of discussion. The BSV blockchain is finding a home in the country, with the BSV blockchain’s association already partnering with the government to launch the BSV Academy in the country, among other projects. The UAE is also quite active in blockchain adoption and is home to the Bitcoin SV Hub.