Qatar has issued a ban on all crypto-related services, essentially blocking one of the most crypto-friendly economies. The QFC Regulatory Authority announced that all “virtual asset services” are not to be conducted at this time.
Qatar Wants to Crack Down on Alternative Value Transfer Channels (also Crypto)
The ban arrives just days after US strikes against Iran killed General Qasem Soleimani, sparking fears of further instability in the region.
Qatar has been hawkish on Bitcoin (BTC), banning local banks from dealing in virtual asset operations. But now, the ban has been extended to even cover peer-to-peer transactions in quasi-money or money substitutes.
The local authority aims to block “anything of value that acts as a substitute for currency, that can be digitally traded or transferred and can be used for payment or investment purposes.” This ban extends to anything as basic as using a wallet and transferring any coin or token.
Historically, crypto usage has surged with geopolitical uncertainty. The conflicts in Syria added to Turkey’s active crypto usage. Failed states like Venezuela and some African countries turned to BTC as a store of value. Carrying funds through crypto networks is also potentially anonymous, or at least pseudonymous, and so far few regulators have cracked down against the very infrastructure of blockchains.
Qatar, the relatively rich state, is looking at a situation where Iran faces tensions with the US. In that regard, Iranians may redouble their efforts to use crypto in lieu of other assets, in an attempt to secure personal funds and make them accessible globally. But cashing out BTC or other coins may be turned into an impossibility by regulators.
Bitcoin Nodes Still Operational Despite Middle East Tensions
Crypto can be borderless, but can also be censored, in extreme cases. Currently, four-node operators are reported active in Iran. Despite the ban, two nodes operate in Qatar, essentially carrying out crypto transactions. Node operators remain anonymous and are hard to discover and shut down.
Crypto trading bans, however, easily affect small-scale exchange operations or other startups that offer crypto-related services. Strict KYC regulations put a burden on smaller companies and may leave only the larger operations with enough resources.
BTC market prices continue to gain after the strike against Iran. Theories appear the rally was sparked by geopolitical uncertainty, with BTC seen as a good hedge for risk. BTC rose from below $7,000 to current levels at [coin_price].
What do you think about Qatar’s ban on crypto-asset services? Share your thoughts in the comments section below!
Images via Shutterstock