Qatar Central Bank (QCB) is contemplating issuing digital currency or CBDC (central bank digital currency) as is known in the international parlance, according to its top official.
"We are in the foundation stage and evaluating the pros and cons of issuing the CBDC," QCB Governor HE Sheikh Bandar bin Mohamed bin Saoud al-Thani, told the second Qatar Economic Forum, powered by Bloomberg.
He said the central bank is currently weighing options to find the right and proper technology platform to issue the CBDC.
Many central banks are discovering to issue their CBDCs and the QCB “is not an exception”, the central bank governor said.
Digital currency, which is expected to lead to a more efficient and cheaper currency management system, uses blockchain and other technologies. A blockchain is a digital ledger that records transactions, which could be tracked.
The QCB is believed to have undertaken research on digital bank licensing and digital currencies.
A CBDC is a country's fiat currency in digital form and is managed by the central bank. Various reports indicate that trade regions like the Middle-East are uniquely positioned to take advantage of CBDC as energy and global trade trends shift.
Most countries are still in the research and development stage, but a few have already started trials and have gone beyond the stages of development, according to reports.
According to reports by the Atlantic Council, 87 countries are taking initiatives to create a CBDC. This accounts for more than 90% of the global GDP (gross domestic product). As the popularity of digital currencies is increasing, the global finance sector is preparing for a transformation.
In the Gulf region, as part of its 2023-26 strategy, the UAE Central Bank is preparing to launch its digital currency. In May 2021, the Central Bank of Bahrain started collaboration with JP Morgan and Bank ABC to develop a cross border digital currency settlement pilot programme.
On crypto currency, Sheikh Bandar said they are technology innovations, which might take the world to a new era of fast, cheap and more accessible payment and financial services but those assets, which are not regulated by the monetary authorities, might be “discreditable”.
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