The Financial Action Task Force (FATF), a global watchdog combating money laundering and terrorist financing, has criticized Qatar Central Bank (QCB) for its lackluster efforts in enforcing regulations against virtual asset service providers.
In a report released on May 31, FATF highlighted Qatar’s need to bolster its capabilities in combating emerging forms of criminal activities, including the sanctioning of virtual asset service providers.
FATF stated that Qatar must enhance its understanding of more complex money laundering and terrorist financing schemes. This comes after the Qatar Financial Centre Regulatory Authority (QFCRA) declared in December 2019 that virtual asset services would not be permitted within or from the Qatar Financial Centre.
The QFCRA warned that penalties would be imposed on any firm involved in providing or facilitating the exchange of crypto assets.
While Qatar has made progress in gathering beneficial ownership information through its near-complete unified register, FATF’s recent report highlights the need for stronger controls to ensure the accuracy and timeliness of collected data.
FATF urged Qatari authorities to improve their investigative efforts against money laundering, asserting that their sophisticated analysis capabilities remain underutilized in identifying instances of illicit financial activities.
Interestingly, despite banning virtual asset service providers, Qatar has revealed its active exploration of potential use cases for a central bank digital currency (CBDC).
In June 2022, Qatar Central Bank’s governor, Sheikh Bandar bin Mohammed bin Saoud Al Thani, announced that the QCB was in the early stages of issuing a CBDC.
The QCB is currently evaluating the benefits and drawbacks of CBDCs while also determining the appropriate technology and platform to implement such a digital currency.
Also Read: Central Bank of UAE Launches CBDC Strategy With G42 Cloud & R3
Qatar now faces the challenge of strengthening its enforcement of regulations on virtual assets while simultaneously navigating the potential introduction of a central bank digital currency, which could reshape its financial landscape.
