Qatar has been quick to embrace the latest technological innovations, especially the new developments in the fast progressing information technology sector.
Governor of Qatar Central Bank (QCB) H E Sheikh Bandar bin Mohammed bin Saoud Al Thani recently said that the QCB is in the process exploring ways to issue a central bank digital currency (CBDC) as several countries across the world are considering launch of CBDC amid massive digital transformation in the financial sector.
Speaking during a session at the Second Qatar Economic Forum on Tuesday, the Governor said: “Many central banks are now considering to issue CBDC, and we are not an exception of that. But we are still in foundation stage. We are evaluating the pros and cons of issuing CBDC and to find the proper and the right technology and platform to issue our CBDC.”
As the awareness about the digital transactions spread, the speed of people adopting this new form of payment is also fast gathering steam. Banks, governments and institutions are in the thick of doing research on the economic and technical feasibility of introducing a new form of digital money and its impact on monetary and financial policy. A Bank of International Settlement report says that over 80 percent central banks are already researching CBDC.
There are different forms of digital currency already in use in the market. The so called cryptocurrencies are a type of digital money, but they are extremely volatile as they don’t enjoy government backing. CBDCs are aimed at overcoming such concerns, while depending on the same technical background. As governments recognise CBDCs as legal tender in the issuing central bank’s jurisdiction, anyone can use them for payments and every merchant must accept them. Central bank digital currencies may be widely in use soon and they increase the safety and efficiency of both wholesale and retail payment systems. A CBDC facilitates quick settlement of retail payment and it could improve efficiency of making payments at the point of sale or between two parties.
For a country like Qatar, which intends to become a cashless society, a digital currency with central bank guarantee will be a credible alternative. No physical bills or coins will be available to individuals in the digital society and all money will be exchanged in a digital format. Withe proper checks and balances, CBDCs will enjoy several other benefits also, as they will ensure faster transactions whether it is in the domestic market or internationally.
Qatar will not lag behind in introducing a recognised digital currency as the country’s digital literacy is very high and equal to the advanced economies in the world if not above them. With the cutting-edge, most modern digital infrastructure already in place in Qatar, adoption of a digital currency can be quick.
