Qatar is actively exploring the possibilities of launching its first central bank digital currency (CBDC). If this happens, the country will become the first Arab nation to launch a CBDC. Meanwhile, the central banks in Saudi Arabia and UAE are collaborating on blockchain projects in the financial sector.
Speaking at the recently concluded Bloomberg-powered Qatar Economic Summit, the Governor of the Qatar Central Bank, HE Sheikh Bandar bin Mohammed bin Saoud Al Thani, asserted that such a development is indeed on the agenda, but it will be thoroughly reviewed beforehand.
“Many central banks are now considering to issue CBDC, and we are not an exception to that. But we are still in foundation stage. We are evaluating the pros and cons of issuing CBDC and to find the proper and the right technology and platform to issue our CBDC,” he said.
The Governor also touched upon cryptocurrencies and the merits they could provide. In his view, they are a “technology innovation,” which has the potential to create a new era of “fast, cheap, and more accessible financial services.”
“However, those crypto-assets, which are not underlined by monetary authority, might be less credible,” he noted.
On the other side, Qatar Investment Authority does not think that highly of digital assets.
“Our team in the technology space is exploring opportunities in the blockchain. This is the space that we’re interested in, not the currency itself,” said CEO Mansoor Al Mahmoud earlier this week, hinting the organization is intrigued by its underlying mechanism – blockchain technology.
Lately, Qatar’s central bank displayed its plans to digitalize most of its products.
“We’re trying to study the different aspects and verticals of fintech. We’re trying to set our direction. Each central bank should study digital banks, considering their growing significance in the global market,” Alanood Abdullah Al Muftah, Head of FinTech at the institution, stated in March.
He also declared the bank’s intention to launch a CBDC, but such an endeavor is far away from becoming live. According to Al Muftah, the authorities need to examine how the product could impact the local financial landscape and then move to action.
Meanwhile, Saudi Arabia and the UAE announced Project Aber is the result of one of the projects, with six commercial banks – three from each country – coming together to focus on blockchain-based currencies.