Blockchain Technology In Qatar

• Law Firm: Sultan Al-Abdulla & Partners
• Subject Matter: Technology, Fin Tech
• Author: Mr Michael Earley
• Published date: 26 January 2023

The Qatar Communication Regulatory Authority ("CRA") recently posted a public consultation document seeking input and comments from relevant stakeholders and other parties regarding its national blockchain blueprint ("Blueprint"). The Blueprint identifies the key elements and requirements of the technology, proposals for the underlying regulatory foundation, the adoption framework, and the ways in which the technology may be adopted. It also provides a set of recommendations for creating a supportive environment for creativity and innovation.

Issuance of the Blueprint follows from the Qatar Investment Authority's ("QIA") recent statement that while it had no interest in investing in cryptocurrencies, it was exploring opportunities in blockchain technology ("blockchain"). The QIA statement was interesting because to many people, cryptocurrency and blockchain are inextricably linked, and since the Qatar Central Bank and the Qatar Financial Centre Regulatory Authority had previously issued circulars and press releases clarifying that dealing in virtual assets (i.e. cryptocurrencies) was prohibited in Qatar, the Blueprint and QIA statement may have seemed to some as being at odds with regulators.

This article seeks to clarify the nature of blockchain, the potential practical uses and benefits of utilising blockchain, and other associated considerations.

What is blockchain?

Blockchain is a permanent, immutable, decentralised ledger that records data, transactions, assets, and documents in sequential order using encryption technology. ¹ The ledger itself is shared among various nodes, or members, with no centralised storage location. Data and transactions are stored in a series of blocks that form part of a sequential chain, with each new block cryptographically linked to the previous block in the chain. ² It is possible to have multiple blockchains in an organisation, and member access can be controlled through the use of varying permission levels. Additionally, blockchains may be public (open to all), private (limited access, membership and participation), or a combination of the two (publicly available but with different permission thresholds for each node). ³

An example of a typical blockchain transaction may better clarify the preceding paragraph. An employee in a shipping company wants to upload data to the company's blockchain. The employee initiates the transaction by sending an upload request to the blockchain network. The data is then shared among...