- The 2024 Qatar Financial Centre (QFC) Digital Assets Framework established the legal and regulatory foundation for cryptocurrencies and NFTs.
- The new framework addresses smart contracts, property rights, and tokenization.
- The framework will ‘support establishing a robust regulatory environment within the financial sector,’ according to Qatar Central Bank’s Governor.
Qatar introduced the 2024 QFC Digital Assets Framework for crypto services providers. The Qatar Financial Centre Authority (QFCA) and Qatar Financial Centre Regulatory Authority (QFCRA) jointly announced it on Sunday.
Driving Growth in the Digital Assets Industry
In 2018, the QCB warned financial institutions that crypto is ‘highly volatile and can be used for financial crimes.’ But recent moves suggest a cautious reconsideration of the country’s stance.
The QFCRA and the QFCA jointly launched the QFC Digital Assets Framework to establish the legal and regulatory foundation for digital assets. It also enables companies to apply for token service provider licenses.
The new framework may establish Qatar as a key player in blockchain adoption. One of the most significant benefits for businesses in QFC is the full foreign ownership and full repatriation of profits.
Additionally, the QFC charges a competitive corporate tax rate of only 10% on locally sourced profits, attracting international businesses.
The framework supports Qatar’s Third National Development Strategy, the final stage to achieve the goals of the Qatar National Vision 2030. It aims to transform the country into an advanced state by 2030 through four development pillars: Human, Social, Economic, and Environmental.
Qatar’s CBDC Is Underway
Qatar Central Bank (QCB) finalized the development of its Central Bank Digital Currency (CBDC) infrastructure in June. In July’s interview, the Chief of the Financial Services Sector at the QFC, Henk Jan Hoogendoorn, said that Qatar’s digital assets framework ‘is expected to be finalized and enacted by Q4 of this year.’
Qatar Central Bank launches the digital currency project #Qatar_Central_Bank pic.twitter.com/DPjSbCiGgw
— مصرف قطر المركزي (@QCBQATAR) June 2, 2024
The infrastructure will leverage blockchain and AI technologies to optimize high-value payments, particularly securities transactions.
Working With Startups in Shaping the Framework
Qatar’s Riyal is pegged to the US dollar at a fixed exchange rate. Qatar is one of the three Middle Eastern countries studied as a model for retail CBDC adoption in an IMF paper due to its high degree of digitization.
Established in October 2023, QFC Digital Assets Lab has welcomed over twenty FinTech companies and startups to innovate their digital asset services and products. The regulatory bodies sought feedback from 37 organizations from the technology, legal, and financial sectors to develop the framework.
The framework was open for comments until January 2, 2024, to enhance its content and structure.
Wrapping Up
The QFC’s new framework has the potential to foster new opportunities in the crypto space and accelerate the adoption of digital assets. Will the US embrace Qatar’s example and bring clarity to crypto regulation? We’ll have to wait and see.
References
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
