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Qatar Central Bank Announces Launch of Digital Currency Project

The Qatar Central Bank in Doha. (Reuters)
The Qatar Central Bank in Doha. (Reuters)
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Qatar Central Bank Announces Launch of Digital Currency Project

The Qatar Central Bank in Doha. (Reuters)
The Qatar Central Bank in Doha. (Reuters)

The Qatar Central Bank (QCB) launched on Sunday its Digital Currency Project (CBDC), which aims to settle large payments with a group of local and international banks, the bank said in a statement carried by the Qatari state news agency, QNA.

The CBDC was launched after successfully completing the comprehensive study of the project.

It will serve as a proactive step to keep pace with the rapid global developments in this field.

The Central Bank explained that after successfully completing the comprehensive study conducted in this field, it will proceed with testing and developing selected applications for the CBDC to settle large payments with a group of local and international banks in a trial environment designed according to the latest advanced technologies.

The project will focus on the applications of the CBDC to increase access to capital markets for operating banks in the country, enhance domestic settlement, and improve the efficiency of securities transactions, the Bank’s statement noted.

This project, which will enter its first experimental phase extending to October 2024, aims to also achieve a set of primary objectives, including leveraging artificial intelligence technologies, distributed ledger technology (DLT), and emerging technologies and establish a strong foundation to enhance liquidity by expanding participation in financial market facilities, considering the aspects related to information security during project implementation.

The start of the CBDC project represents an important milestone and a strategic step towards building a digital economy in the country, QCB said.

It then reaffirmed its continuous commitment to introducing distinguished and valuable initiatives that will help create a conducive environment for the growth of the financial sector, stimulate the widespread adoption of emerging technologies, and promote technological innovations across various fields.

Last April, the United Arab Emirates prepared to complete the first phase of its central bank digital currency strategy. The Digital Dirham aims to address the obstructions of domestic and cross-border payments, enhance financial inclusion and the move towards a cashless society.

In 2019, Saudi Central Bank (SAMA) and Central Bank of the UAE (CBUAE) announced a joint digital currency initiative named Project Aber.

The two banks said Aber will be used as a settlement unit for domestic as well as cross-border commercial bank transactions between the UAE and Saudi Arabia. The joint digital currency plan is only for the use of banks participating in “Aber” project, and will not be available for individuals.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."