Qatar Financial Authority Introduces Ban on Cryptocurrency Services
The Qatar Financial Centre Regulatory Authority (QFCRA) – the country’s regulatory authority – has recently issued a blanket ban on cryptocurrency-related services.
According to a press release, the ban includes not only digital currencies but as well as anything of value that could substitute fiat currencies. Respectively, citizens are banned from cryptocurrency trading and any services that involve trading and transferring digital assets and using it as a payment method or for investment purposes.
“Virtual Asset Services may not be conducted in or from the QFC at this time,” reads the statement issued by the financial regulator.
According to the Regulatory Authority virtual asset services are defined as the exchange between crypto and fiat or crypto and crypto, transfer of crypto assets, safekeeping or administration of virtual assets or tools for their management, and participation in or provision of financial services related to virtual assets.
The new rules were revealed by the QFCRA in a tweet published on December 26th, announcing that authorized firms are not permitted to provide or facilitate the provision or exchange of crypto assets and related services until further notice.
“The Regulatory Authority shall impose penalties in accordance with its rights and obligations […] in case of any violation of undertaking […] activities that are not permitted in the QFC.”
However, the ban doesn’t cover digital forms of securities or other financial instruments that are thoroughly regulated by the regulator, as well as the other governing bodies, including the Qatar Financial Markets Authority, and the Qatar Central Bank.
In the meantime, companies that deal with cryptocurrencies have been ceasing their operations due to the particularly strict anti-money laundering regulations.
Most recently, Qatar has adopted new Anti-Money Laundering and Counter-Terrorist Financing norms, which will require stricter Know-Your-Customer (KYC) and AML procedures, as well as monitoring of all transactions.
Qatar is not the only country to tighten its stance on cryptocurrencies. Companies who deal with cryptocurrencies and related services in the European Union will have to comply with the new directive that comes into effect on January 10th.
Although the financial regulator hasn’t explained why the QFC has taken such a hostile stance towards digital assets, it is likely that the country – like most other countries that have banned crypto – feels threatened by the decentralized nature of cryptocurrencies and regards it as a risk to national security and existing financial system.
In addition to that, the decision doesn’t come as a surprise considering the fact that Qatar had already established a prohibition on Bitcoin trading in 2018 by labeling it as a highly volatile asset that could be used to facilitate financial crimes and is exceptionally prone to cyber-attacks and risk loss of value.
Meanwhile, Qatar is not the only region to have issued a ban on cryptocurrency. In April 2019, the Indian government reportedly began inter-ministerial consultations on a draft law to ban cryptocurrencies outright, known as the Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill 2019. China has also banned domestic cryptocurrency exchanges since September 2017.