Qatar is positioned to climate these headwinds due to its small inhabitants, substantial monetary reserves, and favorable enterprise circumstances for funding. The state has been taking steps in the direction of financial diversification from reliance on revenues from gross sales of hydrocarbon merchandise. On December 3, 2018, it introduced its withdrawal from the Group of Petroleum Exporting Nations (OPEC), to be able to give attention to its pure gasoline export sector. [1]
The Covid-19 pandemic has been a wakeup name, necessitating Qatar’s fast transformation to a digital economic system with the implementation of a cell fee system, AI and blockchain know-how. These new digital applied sciences require a excessive consumption of electrical power, which is presently produced with fossil fuels that adversely influence the surroundings.
Accordingly, Qatar has dedicated to a Nationwide fintech technique to diversify its economic system, which shall be solarized with world’s second least expensive photo voltaic power, to extend the proportion of renewable power in its whole electrical energy era to 20% by 2030 as a part of a broader effort by the gas-exporting nation to decarbonize its electrical energy grid and cut back the footprint.[2]
“The ongoing coronavirus crisis not only highlights the importance of tech and fintech, but also accelerates adoption and development. We will continue in our efforts to enrich and develop the tech and fintech infrastructure in Qatar as an enabling platform and look forward to seeing more international FinTechs, including those from the U.S., easily integrate into Qatar’s thriving eco-system via Qatar Financial Center’s (QFC) FinTech license and wide range of benefits,” defined Mr. Yousuf Al-Jaida, CEO of QFC. The QFC stated it recorded 33% progress in 2019, with over 800 Fintech, IT, tax, and funding consulting companies now a part of the group.
Nationwide fintech technique
Qatar is a number one monetary hub within the Center East. It has been weaving Shariah-compliant blockchain know-how into its current monetary and authorized infrastructure by way of the sector’s emphasis on digital funds – QPay, Qatar’s largest FinTech firm – cash administration; and lending, amongst others, to emerge as a regional fintech hub.
The fintech sector noticed world funding develop to some US$111.eight billion by finish of 2018, up from $50 billion in 2017 based on KPMG. Final yr, to draw overseas Fintech funding, and encourage giant firms to launch subsidiaries within the nation, the Qatar Funding Promotion Company was established which launched free zone incentive applications.
Qatar’s sovereign wealth fund has additionally regularly elevated its investments in tech and Fintech firms, and know-how funding funds like Softbank Imaginative and prescient Fund, which tried to emerge as a formidable photo voltaic investor on the earth.[3]
Qatar Photo voltaic is a 100% owned holding firm shaped by Qatar Basis particularly to spend money on photo voltaic applied sciences, new purposes of photo voltaic and photo voltaic analysis alternatives in step with Qatar’s Nationwide Imaginative and prescient 2030. Qatar Photo voltaic Vitality is the most important photo voltaic know-how improvement and manufacturing facility within the MENA area. QSTec – a high-quality polysilicon that’s utilized in photo voltaic modules – was Qatar Photo voltaic’s first funding into the photo voltaic business. [4]
The coronavirus pandemic has compelled governments worldwide to give attention to bringing blockchain tech to their monetary providers. This contains Qatar, which developed a Nationwide Fintech Technique set forth by the Qatar Central Bank (QCB), which goals to assist the Fintech sector in partnership with a number of key native stakeholders together with QFC[5] and Qatar Growth Bank (QDB), as a result of the Qatari public sector is the largest spender on blockchain know-how.[6]
As a part of its Fintech Technique, the QCB is weighing whether or not to situation a central bank digital forex (CBDC) or not, as Covid-19 has led to an elevated curiosity in digital currencies world wide. “The QCB vastly welcomes the secure use of technological developments that promote monetary stability and inclusion in Qatar. Issuing a CBDC actually has its advantages in innovation and enabling customers to considerably change the way in which they make funds.
Nevertheless, if QCB had been to situation a CBDC, there would even be wide-reaching implications for the economic system, the monetary system, and its operations. Such a call would due to this fact be made solely after contemplating the matter vastly and the way it will assist QCB obtain its public coverage targets. Due to this fact, there may be presently no definitive plan to situation CBDC, nonetheless, the QCB is assessing the alternatives that this know-how presents for Qatar and can proceed to analysis the matter earlier than making a remaining choice” stated the QCB’s FinTech Part.
Throughout March QCB launched specs for a nationwide “Qatar Mobile Payment System” QR code system, a challenge designed to extend monetary inclusion and cut back using banknotes within the nation. The system goals to allow the person to make use of an digital pockets on their cell phone, to hold out P2P funds and pay for items and providers along with conducting withdrawals and cash feeds for digital wallets right away. [7]
“Qatar has demonstrated an incredible synergy among entities in the pursuit of becoming a global leader in FinTech,” stated Mohammed Barakat, managing director of the U.S. Qatar Enterprise Council. “Considering Qatar’s already existing large payment processing and remittance market and its strategy to become a regional gateway for a huge surrounding market, I foresee rapid growth in Qatar’s FinTech sector.”
With its border opened to pick flights from low-risk international locations on August 1[8], the QDB lately launched a FinTech Incubator (for early-stage start-ups) and an accelerator program (for mature FinTechs), that may cater to native and world FinTech entrepreneurs at QFC, providing a ‘FinTech Circle’, a co-workspace for qualifying FinTech firms freed from cost for 12 months, to allow Fintech communities and abilities to community and collaborate. The QFC – with 500 companies and $20 billion in mixed whole belongings underneath administration – operates its personal authorized, regulatory and tax infrastructure.
“From Fintech’s early emergence as a challenger to a conventional financial services sector to its role today as a change catalyst and enabler, it is safe to say that our industry has come a long way. Blockchain is following suit, with 10% of global GDP expected to be stored on blockchain by 2027. In Qatar, blockchain and other emerging technologies can play a major role in Qatar’s overall economic transformation, especially in the digitization of various sectors, where they can be applied in four key areas: government to citizen, business to consumer, government to business, and business to business,” defined QDB CEO Abdulaziz bin Nasser al-Khalifa.
Fintech adoption curves are accelerating with Covid-19 working as a catalyst to Qatar’s solarized Fintech transformation. Qatar’s photo voltaic power three way partnership associate Japanese buying and selling agency Marubeni has already partnered with Blockchain firms LO3 Vitality[9] and WePower[10] to leverage blockchain know-how in creating Marubeni’s renewable/photo voltaic power buying and selling purposes.
[1] https://fas.org/sgp/crs/mideast/R44533.pdf
[2] https://www.pv-magazine.com/2020/07/23/japanese-banks-back-worlds-cheapest-solar-project/I
[3] https://www.bloomberg.com/information/articles/2016-10-19/qatar-said-to-consider-joining-100-billion-softbank-tech-fund?sref=DJAbNMFv
[4] https://www.qstec.com/about/joint-ventures/qatar-solar
[5] www.qfc.qa
[6] https://tdv.motc.gov.qa/Funding-Catalogue/Blockchain
[7] http://www.qcb.gov.qa/English/Information/Pages/28032020.aspx
[8] https://www.argusmedia.com/en/information/2113146-qatar-to-lift-covid19-restrictions-in-four-phases
[9] https://Fintech Zoom.com/information/major-japanese-trading-firm-marubeni-partners-with-us-blockchain-company-lo3-energy
[10] https://Fintech Zoom.com/information/japan-to-solarize-its-burgeoning-digital-economy-expert-take
Concerning the writer
Selva Ozelli, Esq., CPA is a world tax legal professional and CPA who continuously writes about tax, authorized and accounting points for Tax Notes, Bloomberg BNA, different publications and the OECD.
The views and opinions expressed on this article are the writer’s personal, and don’t essentially mirror these held by pv journal.
