The Qatar Central Bank (QCB) has completed the infrastructure for an experimental central bank digital currency (CBDC) project.
A Monday report from state media disclosed that the first phase of the project had commenced. The initial focus would be on using distributed ledger technology and enhanced liquidity for large payment settlements between major local and international banks. The trial is slated to run through October.
The announcement comes as Qatar’s Gulf neighbors also explore CBDCs. The United Arab Emirates has been a founding member of the multi-nation mBridge CBDC project and has already conducted cross-border remittance and wholesale bank transfers on the platform.
For Qatar, the CBDC project was described as part of broader national development strategies, though explicit mentions of a digital currency were lacking in official plans. Last week, the QCB also launched a new fintech sandbox with an expedited testing process.
However, Qatar’s stance on private cryptocurrencies remains uncertain at best. The country’s financial free zone banned virtual asset service providers from operating in 2020, drawing criticism from the Financial Action Task Force last year for lack of enforcement.
Unconfirmed rumors in March also suggested the Qatar Investment Authority could invest in Bitcoin, though the likelihood was widely doubted by analysts given the country’s restrictive crypto policies to date.
