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This thesis examines the feasibility of implementing a retail Central Bank Digital Currency (CBDC) in Qatar using an Ethereum-based blockchain architecture. The research is motivated by Qatar's strategic objectives, including improving payment infrastructure, enforcing monetary policy, fintech innovation and infrastructure modernization. A literature review examined global CBDC initiatives, blockchain architectures, consensus mechanisms, and programmability features, focusing on governance models, privacy frameworks and interoperability.
The findings of this literature review informed the design of a modular, four-layered system aligned with Qatar’s institutional structure and regulatory requirements. The proposed system leverages Hyperledger Besu with QBFT consensus for deterministic finality and Tessera for transaction-level privacy. A suite of smart contracts was developed to manage compliance (KYC/AML), role-based access, cash compatibility and cross-border transactions. Implementation and deployment were conducted using a private network of 4 validator nodes, configured via Docker, with supporting infrastructure built on a dedicated virtual machine.
Functional and empirical testing confirmed the network's ability to maintain consensus under fault scenarios, enforce compliance through smart contracts and achieve limited confidentiality among privacy groups. Scalability testing revealed throughput of up to 127 transactions per second with up to 8 validators and block intervals of 1 second; however, performance degraded with 12 validators, identifying current limits in scalability and resource efficiency. Similarly, privacy enforcement via Tessera was effective in basic cases but encountered limitations with standard ERC-20 contract compatibility.In conclusion, the study confirms that an Ethereum-based blockchain is viable for controlled deployment in Qatar. This is primarily due to its programmability, which ensures regulatory compliance and fosters the development of innovative financial products. However, limitations in privacy and scalability necessitate further research into scaling techniques and alternative privacy solutions to meet the requirements of nationwide retail CBDC implementations. Alternatively, dedicated blockchain frameworks and ERC standards for CBDCs can offer a more sustainable option that natively supports the scalability and privacy requirements of central banking.