Qatar is ushering in a new era of digital payments despite maintaining a ban on digital assets, with its central bank kicking off a digital payment service providers licensing regime by issuing the first pair of permits.
Reuters reported that the beneficiary firms are telecom giants Vodafone Qatar and Ooredoo. Vodafone’s iPay and Ooredoo’s Ooredoo Money can now support digital payments under the Qatar Central Bank’s (QCB) supervision.
In a tweet, the QCB said the move aims to contribute to the growth of the financial technology sector and enhance financial inclusion. It added that approval for other digital payment service providers would soon follow.
The approval is part of the country’s preparation to host one of the biggest sporting events, the FIFA World Cup, later this year. Qatar has been onboarding more payment solutions for the host of tourists it intends to accommodate.
Last week, QCB announced that it had approved several commercial banks to support Google Wallet, allowing their clients to make mobile payments with Google Pay. The banks include Dukhan Bank, Qatar Islamic Bank, Qatar International Islamic Bank, and Qatar National Bank.
Similarly, QCB also now accepts all digital wallet solutions for cards, such as Samsung Pay and Apple Pay.
Qatar still not interested in digital assets
While it is pushing to welcome digital payments, Qatar has been enforcing a ban on digital assets trading and storage since 2020, joining eight other jurisdictions. In a recent interview with Bloomberg, the Chief Executive Officer of sovereign wealth fund Qatar Investment Authority (QIA) stated that Qatar still has no interest in digital currencies.
The country is instead looking to make significant investments in blockchain technology, said Mansoor bin Ebrahim Al-Mahmoud. In the same interview, QCB Governor H.E. Sheikh Bandar bin Mohammed bin Saoud Al Thani slammed digital assets as being too risky and volatile.
Meanwhile, QCB has been working on a central bank digital currency (CBDC) which it hopes will help digitize payments further. First disclosed in March, the QCB said in a June progress update that the development of the digital currency was still in the “foundation stage.”
The central bank governor said the QCB was still exploring the pros and cons of issuing a CBDC while looking at the right technology and platform to launch it.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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