Governments across the world have realized that they will need to make an important decision in the coming years. This decision is based on how they intend to regulate cryptocurrencies. Currently, some countries have taken a stance on cryptocurrencies, while others have remained silent. For the vocal countries, crypto has either been banned or embraced. However, for countries where the government has been silent on this issue, crypto has remained an unregulated and largely uncertain sector.
Some of the countries that have embraced crypto are Bahrain, Germany, and El Salvador. Bahrain has an extensive crypto regulatory framework for companies that intend to operate in its region. El Salvador has also made Bitcoin a legal tender. Many of the countries that have embraced crypto have successfully been able to attract large crypto companies to their respective territories. However, Qatar’s approach to crypto is significantly different from any of the countries that have been highlighted.
Also Read; Crypto Regulation Frameworks in the Middle East
Qatar’s Crypto Regulations – All There Is To Know
Qatar’s primary regulatory approach to crypto is to ban it. The country banned crypto as far back as 2020 and has not reversed the ban. The major justification given for this ban is that many crypto platforms only adhere to minimal and ineffective KYC measures. The government also cited crypto’s volatility and susceptibility to financial crimes as a rationale for its cautionary approach to crypto.
The crypto activities currently prohibited in the Qatar Financial Centre include crypto trading and crypto asset services like exchange services. While it can be argued that this policy aims to protect innocent investors, other Middle Eastern countries have embraced crypto. Many of these countries have started to license multinational companies that have expressed interest in Qatar’s crypto market.
However, despite Qatar’s approach to cryptocurrencies, the country does not automatically dismiss all innovations. For instance, the Qatar Central Bank (QCB) has announced plans to launch a fintech strategy to increase its fintech presence in the country. The Central Bank has also deployed infrastructure to enable commercial banks to approve payments from users’ digital wallets.
Also Read; How Global Tensions Are Increasing Sensitivity of Crypto Regulations In The Middle East
Conclusion
Regulation is an indispensable factor for countries seeking to establish a globally-recognized crypto hub. While there are valid concerns about crypto volatility and possible financial crimes, these concerns can easily be curbed with KYC and AML controls. Thus, if Qatar decides to enhance its crypto sector by removing the ban, it has to create an enabling environment for crypto firms to thrive. This will provide enough incentive for companies seeking to launch operations in the Middle East.
