Qatar Central Bank Joins CBDC Race, Evaluates Possibilities

An executive at the Qatar Central Bank (QCB) has revealed that the financial institution is in the process of studying digital bank licensing and digital currencies.

The insider, Alanood Abdullah Al Muftah, the head of the QCB’s fintech division, also noted that the study will help the apex bank acquire a better understanding of the key areas it should focus on.

Speaking to The Peninsula (a Qatari media house) Al Muftah explained that the study will inquire into “the different aspects and verticals of fintech.” The study will also ascertain the feasibility for the Arab nation to have a central bank digital currency (CBDC).

She explained: “In the next couple of months, there will be [a] greater understanding about the future focus of [the] QCB. 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.”

Qatar Central Bank to Add More Test Subjects to Sandbox

Concerning the regulatory sandbox, Al Muftah noted that three startup companies ope wrong in the payments sector are working in collaboration with the central bank in testing solutions. She added that the QCB is also considering accepting multiple requests of companies applying to operate in the regulatory sandbox.

Meanwhile, Narayanan Srinivasan, the chief operations and digital officer at Dukhan Bank (a retail bank in Qatar), was quoted saying that his bank is evaluating the possibility of launching a digital bank in the country. However, Srinivasan clarified that his bank would only develop the proposed digital bank after acquiring a better understanding of the economics behind it. He noted:

“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.”