Qatar to Invest in Bitcoin Industry?

The presence of representatives of Qatar at the BitcoinAtlantis conference that took place in the Madeira region in Portugal has made many believe that the Gulf nation is exploring the possibility of investing in the Bitcoin industry, whose market capitalisation is put at $1.2 trillion at present.

The BitcoinAtlantis conference was attended by Bitcoin thought-leaders who gathered to discuss the future of the growing $1.2 trillion asset and with Qatar’s representatives also in attendance, rumours are rife that the Qataris may be considering investing some of the country’s energy profits into the asset.

The rumours were given more attention when Anthony Scaramucci of the US-based global investment firm Skybridge Capital explained on an X post that the outspoken Bitcoin advocate Max Keiser had been convincing Qatar to follow El Salvador, which has adopted Bitcoin strategy for their sovereign wealth fund (SWF).

El Salvador adopted Bitcoin in September 2021 as its second legally-recognised national currency alongside the US dollar and raised the profile of the crypto currency. By doing so, the South American country became the first nation to adopt the “Bitcoin Standard,” serving as a testing ground for other countries looking to adopt the digital currency as legal tender.

However, this decision had little impact on Bitcoin’s price as El Salvador was a small country in the world of Bitcoin.

Greater Impact                                        

On the other hand, Qatar’s adoption of Bitcoin will have a much bigger impact as its SWF – Qatar Investment Authority (QIA), is awash with more than $500 billion in reserves. Even if Qatar pumps 5% of QIA’s reserves in Bitcoin, the price of the cryptocurrency will shoot up to new levels.

According to a report by Coinrule, Qatar and other states may invest in BTC to improve portfolio performance or to diversify to reduce overall portfolio volatility. Alternatively, it may also be a way for them to divest from dollar-denominated assets, that traditionally yield the greatest returns, without reducing performance.

Sanctions on countries such as Russia, Iran and North Korea also demonstrated to the world that as long as their assets remained on systems controlled by other nations, they could not oppose the interests of certain countries.

Bitcoin’s impartiality and decentralisation are a way for countries to assert ownership over their assets, with a level playing field for all who use it. Bitcoin could also be used to price and trade energy without the dollar, the report said.

Digital Assets Lab

While the Qatar’s government has not made any official announcement about investing in cryptocurrencies, the Qatar Financial Centre (QFC) Authority, a leading onshore financial and business centre in the region, opened the QFC Digital Assets Lab in October last year, with support from Qatar Central Bank.

The Digital Assets Lab is the inaugural programme to be launched under the Innovation Dome, an innovative platform that fosters transformative initiatives, aiming to position the country as a leader in the digital realm.

The Lab will foster open innovation in Qatar through proof-of-concept and proof-of-value, accelerating the growth of Qatar’s digital sector in line with the vision to establish Doha as a global financial and commercial hub by 2030.