FILE - Central Bank of Qatar
CAIRO – 8 February 2018: Qatar’s Central Bank warned financial institutions including banks not to trade in bitcoin or any other cryptocurrency, according to financial sources and a circular seen by Reuters.
“The central bank politely requested banks and exchange houses in the country not to deal in any way with this currency, or exchange it with another currency, or open accounts to deal with it, or send or receive any money transfers for the purpose of buying or selling this currency,” the Central Bank said.
The bank added that it will impose penalties under existing legislation in the event of any violation of the circular.
However, in January 2018, Qatari Leaks released a video on Sunday claiming that the Qatari ruling intends to recognize virtual currencies such as Bitcoin in a move that would prompt major world economies that reject virtual currencies to cut their economic ties with Qatar.
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator.
Qatari banks have been suffering from accumulated foreign debts amounting to QR 177.3 billion since the start of the Gulf crisis in June 2017.
In the first appearance in the international debt markets after the boycott, Qatar sent out a request for proposals to banks to arrange an international bond issue.
Qatar’s relations with several Arab states have been strained since May 24 over a leaked statement attributed to Qatari Emir Sheikh Tamim bin Hamad, criticizing the Gulf’s foreign policy with Iran, describing it as “unwise”.
On June 5, Qatar was hit by its biggest diplomatic crisis in years after multiple Arab nations, including Egypt, Saudi Arabia, the UAE and Bahrain cut diplomatic ties with Doha and imposed economic sanctions, accusing it of funding terrorism, a claim Qatar rejects. The Arab Quartet halted all land, air and sea traffic to and from Qatar and withdrew their diplomats and ambassadors from the country.
The Arab quartet issued 13 demands to Doha – then shortened them to six principles - which included closing Al-Jazeera television station, curbing relations with Iran and closing a Turkish military base.