Tuesday, December 12, 2023
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Editor's PickQFC seeking to spur DLT innovation with new digital assets initiative

QFC seeking to spur DLT innovation with new digital assets initiative

As part of the country’s ambitious economic diversification ambition, Qatar Financial Centre (QFC) intends to take advantage of distributed ledger technology (DLT) through its newly minted Digital Assets Lab to bolster its financial sector in a bid to anchor itself as an international financial and commercial hub by 2030.

Officially inaugurating the QFC Digital Assets Lab at the end of October, the central bank-backed program seeks to court fintech innovators, researchers and the private sector to explore and develop new digital assets-based and DLT solutions, products and services.

Notably, participants of the Digital Assets Lab would also be on a pathway toward securing a full license to operate in Qatar. Related regulations are underway: the QFC Regulatory Authority (QFCRA) is currently gathering market feedback on its proposed Digital Assets Regulatory Rules Framework, which was released early last month.

“The engagement that the Digital Assets Lab will bring directly with entrepreneurs and the financial sector will also be an important input into our public consultation on the legal and regulatory framework for digital assets, which was issued on the 4th October,” said Michael Rayan, CEO of QFCRA.

The draft framework establishes the concept of tokens and outlines provisions related to the transfer of tokens, token ownership and rights in the underlying and various definitions for the type of token service providers.

Qatar is following in the footsteps of its neighbors in embracing virtual tokens in a regulated manner. Bahrain and the UAE have introduced crypto rules while Oman is expecting to issue its regulations by the end of this year.

The Digital Assets Lab is parked under QFC’s Innovation Dome, a symbol of Qatar’s commitment to its National Vision 2030, which has underpinned the strategic decisions of government agencies and economic actors, including Qatar Central Bank’s Fintech Strategy unveiled in March.

It is hoped that the lab would create a favorable environment to diversify digital assets, enhance market competitiveness as well as nurture entrepreneurship and innovation.

“The initiative will also support the development of other economic sectors by leveraging developments in digital technologies across multiple fields beyond the financial technology realm,” said Sheikh Bandar Mohammed Saoud Al-Thani, the central bank governor.

Like its regional peers, Qatar has been aggressively pushing to develop its digital finance proposition. It is worth noting that the State has identified Islamic finance, or Islamic fintech, as a key pillar of its national fintech strategy. To that end, Qatar has launched Qatar FinTech Hub and offer special incentives to set up Islamic venture capital funds.

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