The 35-page document sets out the purpose of a digital bank, the regulation required for it to operate in Qatar, and the process through which institutions can get a Qatari digital banking license.

To become licensed, a prospective digital bank must show a commitment to providing affordable access to financial services and promoting financial inclusion for unserved or underserved segments. 

Digital banks must also have their headquarters in Qatar and have the majority of their Board of Directors resident in the country; this, along with strict anti-money laundering and financial crime regulations, is intended to limit fraud and make it easier to hold institutions accountable. 

Digital banks are often seen as more prone to collapse or fraud because of a lack of regulation and low barriers to entry, making it easy to set up fraudulent institutions to evade taxes or launder money. The framework focuses on improving access to finance and lowering barriers to entering the banking industry without compromising safety – which is especially crucial to increase access for small and medium-sized enterprises (SMEs) that are often underserved by major institutions.

In a statement, the Qatar Central Bank praised digital banks’ commitment to “promoting financial inclusion and providing exceptional financial services that cater to the needs of all segments of society,” highlighting their key role in ensuring even small companies can access banking services.

Qatar, which published similarly significant regulations on DLT and AI use in finance earlier this year, may be set to play a key role in the digitisation of finance by publishing clear but not overly restrictive legislation on new technology.