Qatar Crypto Ban Reported: What Could It Mean?

Reports suggest that a Qatar crypto ban has been put in place. With a population of 2.6 million, most of whom are foreign expats, Qatar has one of the highest per capita incomes on the planet. What has caused this Middle East country to ban digital money?

Image by Gustav Brandt from Pixabay

The Reports

This story first appeared in the International Investment site. They state that the QFC Regulatory Authority has made a statement on the matter. This statement is quoted as saying that “Virtual Asset Services may not be conducted in or from” the country.

It went on to say that this refers to “anything of value that acts as a substitute for currency”. They also mention digital trading and transferring, as well as payments and investments. So, it seems to be a pretty comprehensive ban on all forms of crypto usage.

The country’s Central Bank  started to block the use of cryptocurrencies in 2018. They “politely requested banks and exchange houses in the country” to not deal with Bitcoin or other digital currencies. However, a definitive Qatar crypto ban doesn’t seem to have occurred at that time.

The latest report suggests that “digital forms of securities or of other financial instruments” are still permitted. This applies to those products that are regulated by the Qatar Central Bank or the Qatar Financial Markets Authority.

The Possible Impact

Qatar has a relatively small population. But it has a large percentage of foreigners and high income levels. This makes it ideal for cryptocurrencies. The timing of this report is also interesting. News of the Qatar crypto ban comes just days after the US military strikes in the region. However, it isn’t clear whether there is a link.

Current uncertainty in the Middle East could drive crypto interest higher. Bitcoin and other tokens are typically more sought-after in times of conflict. Indeed, the BTC price has risen in the wake of the US strikes in Iran.

This new regulation seems to end the possibility of Qatar becoming a major centre for cryptocurrencies. It remains to be seen whether other Middle East countries introduce similar laws. If not, locals could turn to Bitcoin to deal with the current uncertainty.

Will Qatar now introduce is own, state-backed digital coin? We have seen lately how China is tightening its crypto laws. The Asian giant is doing this as it prepares to launch a digital version of its fiat money.

In 2019, a gold-backed iDinar was said to be launched by this country. It was called the first Islamic digital e-token in news stories. Yet, there have been no recent updates on the project.