Qatar launches new digital assets regulatory framework: Key details you need to know

Qatar has launched a new regulatory framework for digital assets, including cryptocurrencies, within its business hub, the Qatar Financial Centre (QFC).

Announced on September 2, this framework results from a collaborative effort between the Qatar Central Bank, the Qatar Financial Centre Authority (QFCA), and the Qatar Financial Centre Regulatory Authority (QFCRA).

Details of the framework

The QFC Digital Assets Framework outlines how digital assets will be created, regulated, and managed within the QFC, a free economic zone offering a favorable regulatory environment, tax benefits, and 100% foreign ownership, among other advantages.

The framework addresses key aspects such as the creation, holding, transfer, and exchange of digital assets within the QFC.

It also sets standards for asset tokenization, ensures legal recognition of property rights in digital tokens and their underlying assets, and introduces a licensing regime for entities providing token services.

This includes operating investment token exchanges, generating tokens, and providing custody services.

Notably, tokens used solely as currency substitutes (e.g., cryptocurrencies and stablecoins) are prohibited from being created or traded within the QFC.

Any token service conducted in or from the QFC must be licensed by the QFCA, and only permitted tokens—those not classified as excluded—are allowed.

The framework grants legal recognition to smart contracts, making self-executing agreements enforceable under the law.

It also requires token service providers to adhere to anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations, including customer due diligence, transparency in token transfers, and secure token handling and storage.

Additionally, investor protection measures are introduced to enhance market integrity and ensure fair treatment of participants.

These measures include clear disclosure requirements for investment tokens and strict controls over token custody and exchange activities, aimed at building trust in the digital asset ecosystem.

The new regulations took effect on September 1.

Qatar’s embrace of emerging technology

According to Qatar Central Bank Governor His Excellency Sheikh Bandar bin Mohammed bin Saoud Al Thani, the framework is expected to stimulate economic opportunities in line with Qatar’s “Third Financial Sector Strategy.”

Launched in 2023 by the central bank, this initiative aims to unlock Qatar’s full economic potential.

This development follows the introduction of the Digital Assets Lab in October 2023, where over twenty start-ups are currently testing their offerings before commercialization.

In addition to the digital assets framework, Qatar’s central bank is advancing its initiative to develop a central bank digital currency (CBDC).

The project is in its testing phase, which will continue until October, with plans to officially launch the CBDC by the end of 2024.

The post Qatar launches new digital assets regulatory framework: Key details you need to know appeared first on Invezz