• The Financial Action Task Force (FATF) has criticized Qatar Central Bank (QCB) for not doing enough to regulate virtual asset service providers.
• Qatar’s authorities have been urged to improve their investigative efforts toward money laundering and use their “sophisticated analysis capabilities” to identify instances of it.
• Qatar has banned virtual asset service providers but is actively exploring potential use cases for implementing a central bank digital currency (CBDC).
Qatar Slammed by FATF for Lack of Action Against Crypto Companies
QFCRA Announces Ban on VASPs in 2019
The Financial Action Task Force (FATF) has recently slammed Qatar Central Bank (QCB) for making little effort to enforce its own regulations prohibiting virtual asset service providers (VAPs). In December 2019, the Qatar Financial Centre Regulatory Authority (QFCRA) announced that virtual asset services may not be conducted in or from the Qatar Financial Centre. The regulatory authority warned at the time that penalties would be imposed in accordance with the QFCRA’s rights and obligations to any firm that provides or facilitates the provision or exchange of crypto assets.
FATF Calls For Improvements
In a report published on May 31, 2021, the global money-laundering and terrorist financing watchdog highlighted that Qatar needs to advance its capabilities to effectively combat evolving forms of criminal activity, including sanctioning virtual asset service providers. FATF also stated that Qatar needs to improve understanding of more complex forms of money laundering and terrorist financing. In addition, FATF called for improvements in gathering beneficial ownership information through a near-complete unified register and controls to ensure accuracy and up-to-date information collected remains accurate and up-to-date. Furthermore, FATF urged Qatari authorities to improve their investigative efforts toward money laundering, as well as make full use of its “sophisticated analysis capabilities” when identifying instances of it.
Qatar Explores Potential CBDC Use Cases
Although Qatar has banned VASPs within its jurisdiction, it has revealed that it is actively exploring potential use cases for implementing a central bank digital currency (CBDC). It was previously reported in June 2022 that the QCB is currently in the “foundation stage” of researching CBDC development projects with plans underway for possible testing later this year.
The recent report from FATF highlights that while progress has been made by Qatar in combating financial crimes such as money laundering and terrorist financing, there is still more work needed before these activities can be effectively curbed within its borders. With an active exploration into potential uses cases for implementing a CBDC possibly underway soon, one can only hope this will encourage further regulation against VASPs within Qatar’s jurisdiction.