According to a recent report, cryptocurrency activity has been banned throughout the Qatar Financial Centre. Crypto to crypto trades, crypto to fiat exchanges, and a number of other services are no longer legally permissible. Notably however, activity involving the digital form of securities — to include security tokens — remain unaffected.
Cryptocurrencies Banned in Qatar Explained
Qatar is home to more than 2.5 million people. While most countries in the middle east have consistently remained hesitant to support the use of digital assets, Qatar has established a different reputation — until now.
The Qatar Financial Centre Regulatory Authority (QFCRA) has reportedly announced that all services involving cryptocurrencies have been banned throughout the Qatar Financial Centre (QFC), until further notice. The QFCRA said,
“Virtual Asset Services may not be conducted in or from the QFC at this time.”
The QFC is a special jurisdiction within Qatar. It has its own legal, business, tax, and regulatory infrastructure. The QFC was designed to attract businesses and facilitate economic development throughout Qatar.
The QFCRA defines ‘virtual asset services’ broadly. The definition includes crypto to fiat exchanges, crypto to crypto trades, and even services that facilitate the trading, custody, and issuance of virtual assets.
Notably however, security tokens and other financial instruments regulated by the QFCRA, the Qatar Central Bank, or the Qatar Financial Markets Authority, are not included in the ban.
Why are Cryptocurrencies Banned in Qatar?
According to an article from Qatari media outlet Al-Watan, Qatar has recently implemented country-wide regulations regarding digital assets. The country is specifically trying to combat the financing of terrorism and money laundering through virtual currencies.
Sheikh Abdulla bin Saoud Al-Thani, the governor of Qatar’s Central Bank said,
“The State of Qatar affirms that fighting money laundering and terrorist financing requires a strict and effective regulatory and legislative framework, whereby the powers and responsibilities of both government agencies and relevant ministries are defined in relation to combating money laundering and terrorist financing.”
A number of countries across the globe are implementing stricter laws to combat the illicit use of cryptocurrencies in terrorist financing and money laundering. In just a few days, on January 10th 2020, the European Union (EU) is set to impose the Fifth Anti-Money Laundering Directive (5AMLD).
5AMLD will require digital asset platforms and even wallet providers to verify and record customer identities to prevent anti-money laundering activities. Throughout the EU, responses have differed. Countries such as Germany, Italy, and the Netherlands are expected to adopt the law, while others plan to refuse it.
Germany has still taken a proactive approach to both regulating and facilitating the use of digital assets. On January 1st 2020, a bill came into effect from the German Parliament effectively allowing banks to sell and store cryptocurrencies.
BaFin, Germany’s securities regulator, has also facilitated several compliant Security Token Offerings (STOs). Bitbond, for example, raised more than €2.1 million through an STO.
What do you think about Qatar banning all cryptocurrency activity in the QFC, but allowing security tokens to remain legal? What does that say about the future of security tokens? We’d like to know what you think in the comments section below.
Image courtesy of Daily News.