Because Qatar has a small population, really large monetary reserves and investment-friendly trading situations, it is more positioned than maximum to cope with pressure. It is working to reduce its reliance on oil and fuel exports in favor of economic diversification. On 3 December 2018, the country took some other step towards this purpose by pronouncing its withdrawal from the Organization of the Petroleum Exporting Countries to focus more on its herbal fuel export sector.
With the emergence of the COVID-19 pandemic, Qatar has also embarked on a national monetary generation strategy to diversify an economy that will be driven through the world’s cheapest solar energy for its purpose of expanding the share of renewable energy in its overall electricity. 20% production by 2030.
Related: They want to report carbon emissions amid the coronavirus pandemic
Yousuf Al-Jaida, Executive Director of the Qatar Financial Centre, explained:
“[The demanding situations of COVID-19] not only underscore the importance of generation and financial technology, but also drive adoption and expansion. We will continue our efforts to enrich and expand Qatar’s financial technology and generation infrastructure as an enabling platform and look forward to seeing more foreign FinTech, adding those from the United States, seamlessly integrating into Qatar’s thriving ecosystem through QFC’s FinTech license and a wide variety of benefits.”
QFC reported a 35% expansion in 2019 and, according to its website, now has more than 900 customers in sectors, whether monetary and non-monetary.
Qatar is a leading monetary center in the Middle East. It has incorporated Sharia-compliant blockchain generation into its existing monetary and legal infrastructure with virtual invoices with Qpay, Qatar’s largest money generation company, as well as cash and loan control, among others, to emerge as a regional monetary generation center.
The money generation sector has noticed an increase in global investment from $50 billion in 2017 to $111.8 billion through the end of 2018, according to Big Four audit company KPMG. In 2019, to attract foreign financial technology investment and inspire giant corporations to free up subsidiaries in the country, Qatar created the Investment Promotion Agency, which brought “free zone” incentive programs. Qatar’s sovereign wealth fund has continued to increase its investments in generation and fintech companies and investment funds in generation.
The ongoing coronavirus pandemic has brought dramatic changes around the world, forcing governments around the world to make the advent of blockchain generation in their monetary facilities a priority. This includes Qatar, which has developed a national fintech strategy explained through the Central Bank of Qatar, or QCB, which targets the fintech sector in partnership with several key local stakeholders, adding QFC and Qatar Development Bank, or QDB, such as Qatar. The public sector aims to spend the most on blockchain generation until 2021.
As a component of its fintech strategy, the QCB is contemplating the issuance of a central bank virtual currency, as COVID-19 has generated greater interest in virtual currencies around the world. “The QCB welcomes the use of technological advances that herald monetary stability and inclusion in Qatar,” said a representative of the QCB fintech segment. “The issuance of a CBDC actually has its benefits in terms of innovation and allows users to componently replace the way they make payments.” The representative added:
“Lately there is no definitive plan to factor CBDC, however, the QCB is evaluating the opportunities presented by this generation for Qatar and will continue with the factor before making a final decision.”
Related: Not like before: Virtual coins make their COVID-19 debut
In March, the QCB presented its QR Code-based “Mobile Payment System”, a task designed to encourage monetary inclusion and use of banknotes in the country. It aims to allow citizens to use an electronic wallet on their cell phones, to transact between Americans, and to pay for goods and services. It also allows instant withdrawals and money deposits.
“Qatar has demonstrated synergy between entities in order to form a global leader in financial technology,” said Mohammed Barakat, executive director of the US-Qatar Business Council. He also added:
“Given Qatar’s gigantic payment and remittance processing market and its strategy for a regional gateway to a massive surrounding market, I anticipate an immediate expansion in Qatar’s FinTech sector.”
With the reopening of Qatar’s border to flights from low-risk countries on August 1, QDB recently introduced a fintech incubator (for start-ups) and an acceleration program (for mature companies) that will target local and global entrepreneurs. To help fintech netpaintings netpaintings and collaborate, QFC offers “FinTech Circle”, a co-pay area where eligible fintech corporations can work loose for 12 months. The CFQ, which claims to have more than 900 corporations as clients and $20 billion in combined total assets under control, operates its own legal, regulatory and fiscal infrastructure.
“From the early emergence of financial technology as a challenge for a traditional monetary facility sector to its current role as a catalyst and facilitator of change, it is to say that our sector has come a long way,” Abdulaziz bin Nasser al-Khalifa said. CEO of the QDB. “The blockchain does the same, and 10% of world GDP is expected to be stored in the blockchain until 2027.” He also added:
“In Qatar, blockchain and other emerging technologies can play a major role in Qatar’s overall economic transformation, i.e. in the digitization of sectors, where they can be implemented in 4 key areas: government to citizen, business to consumer, corporate governance and enterprise. -To negotiate.”
Qatar has joined a number of countries around the world that more strictly implement the fight against the illicit use of cryptocurrencies in the financing of terrorism and cash laundering.
Related: COVID-19 pandemic boosts cryptography updates in J5 countries
In December 2019, the QCB followed new regulations in the form of circulars 19, 21, 23 and 46 of 2019, which prohibit facilities from virtual asset providers, or VASP, from operating in Qatar to combat cash laundering and terrorist financing, which will read in accordance with the recommendations of the Financial Action Group, which come with the adoption of a threat-based technique to combat money laundering and financing of the terrorism and threat assessment. The law provides for the consequences of violation of the law in the form of monetary sanctions and imaginable imprisonment, and calls for comprehensive cooperation in the component of foreign components such as the United States, China, India, Australia, Bangladesh, Malta, Pakistan and more. .
Following regulatory updates by LBC in Qatar, the Qatar Financial Markets Authority, or QFMA, and the Qatar Financial Center Regulatory Authority, or QFCRA, also issued similar statements in December 2019 that require all facilities involving cryptocurrencies to be banned by QFC until they are made more as a reminder. VASPs are not included in the scope of QFCRA and QFMA licenses, and that any company acting as VASP operates outdoors within the scope of its license.
For the purposes of the QCB circulars and the QFMA and QFCRA opinions, QFCRA largely defines virtual asset installations as the exchange between virtual assets and fiat currencies; Exchange between one or more virtual asset bureaucracies; Virtual assets transfer custody and/or management of virtual assets or tools to virtual assets; and the participation and provision of economic facilities similar to the offer of an issuer and/or the sale of a virtual asset. However, security tokens or other virtual economic or economic tools that are regulated through QFCRA, QCB or QFMA are not included in the ban.
For example, according to the QCB representative, debit cards in cryptocurrencies cannot be issued through money service providers in Qatar. A cryptocurrency debit card works much like any other traditional prepaid debit card, but when you top up the card from a normal bank account, the budget is transferred from a cryptocurrency wallet. The card provider automatically converts the cryptocurrency into the fiat currency of your choice.
Since 2013. Such arrangements for the movement of cryptocurrencies from a wallet and conversion into fiat currency are no longer allowed in Qatar under the new cryptocurrency regulations.
Related: ‘The Enron of Europe’ – What we know about the Wirecard scandal
As QCB’s fintech representative said:
“Qatar is recently assessing the dangers associated with virtual assets and problems such as taxes on virtual assets will be a component of this assessment.”
Fahad Al Dosari, Qatar’s industrial attaché in the United States, added that “Qatar is one of the strongest economies in the world and we are offering strong monetary incentives to U.S.-based corporations, such as our 20-year tax breaks for corporations operating in Free Zones.” He also added:
Under the leadership of His Highness Emir Sheikh Tamim bin Hamad Al Thani, all government agencies in Qatar have committed to making U.S. investments in the region and making Qatar a hub for monetary generation for the Middle East. »
It should be noted that the United States and Qatar do not have a double taxation agreement, however, the two countries have signed a foreign tax compliance agreement and have put in place the Foreign Account Tax Compliance Act.
Related: Virtual Exchanges and U.S. Customer Care, IRS: Expert Blog Arrives
In addition, the United States is Qatar’s best friend in defence and security, and in 2018 the two countries signed a Memorandum of Understanding on combating terrorism and its financing and combating cybercrime.
“Terrorist networks have adapted to technology, wearing down complex monetary transactions in the virtual world, adding through cryptocurrencies. THE IRS-CI Special Agents of the D.C. Cybercrime Unit are working diligently to get to the bottom of those monetary networks,” the US Treasury said. Secretary Steven Mnuchin said after the department. of Justice announced the largest ever seizure of cryptocurrency assets used through terrorist organizations, following an investigation by multiple agencies through the National Security Investigations Division of the Federal Bureau of Investigation, Immigration and Customs Enforcement and the Criminal Investigations Division of the IRS. The research used Chainalysis’s cryptographic research tools.
Related: U.S. Plan To better monitor illegal cryptography activities
U.S. taxpayers and their similar corporations that have “operations” in Qatar will have to register IRS Form 5713 with their tax returns to avoid punitive consequences.
The reviews, opinions and reviews expressed herein are exclusive to the author and necessarily reflect or necessarily constitute Cointelegraph’s perspectives and reviews.
Selva Ozelli, Esq., CPA, is a foreign tax lawyer and chartered accountant who writes about tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.