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Oman Will Establish a Regulatory Framework For Crypto Assets

  • Oman is set to introduce a regulatory framework for crypto assets, providing a much-needed boost to the burgeoning industry

  • This move will provide clarity and certainty for investors, allowing them to confidently invest in the digital asset space

  • The framework will also help to protect investors from potential risks associated with crypto assets, such as fraud and market manipulation

17-Feb-2023 By: Shikha Jha
Oman Will Establish

Oman is set to establish a regulatory framework for virtual assets

Providing a secure and reliable environment for investors and businesses.

Despite the warnings issued by Oman's Central Bank about investing in digital assets, approximately 65,000 of the country's residents still hold cryptocurrencies. This demonstrates the growing popularity of digital currencies in the region, despite the potential risks associated with them.

The Capital Market Authority (CMA), the regulator of Oman’s financial markets, is looking to establish a comprehensive regulatory framework for the virtual asset industry in the Sultanate.

In a Feb. 14 press release, the CMA outlined the new rules, which include oversight of virtual asset activities, a licensing process for virtual asset service providers (VASPs), and a framework to identify and mitigate risks associated with this new asset class. The announcement reads:

“The aim of this new regulation is to create a market regime for virtual assets that includes rules to prevent market abuse, as well as robust surveillance and enforcement mechanisms.”

The CMA's new regulations are intended to provide a secure and transparent environment for virtual asset activities, while also protecting investors and promoting the development of the industry in Oman. With the introduction of these regulations, the CMA is taking a proactive approach to ensure the Sultanate remains at the forefront of the virtual asset industry.

The Capital Market Authority (CMA) of Oman recently proposed a regulatory framework for virtual asset activities. This framework includes issuing crypto assets, tokens, crypto exchange products and services, initial coin offerings, and more. To ensure the framework was comprehensive and effective, CMA enlisted the help of XReg Consulting Limited, a virtual assets policy and regulatory consultant, and Said Al-Shahry and Partners, Advocates & Legal Consultants (SASLO), an Omani law firm.

The proposed regulatory framework is in line with Oman’s Vision 2040, an ambitious initiative to digitally transform the country’s economy and attract global players. By introducing this regulatory oversight, Oman is positioning itself as a leader in virtual asset adoption in the Middle East. However, the country’s central bank appears to be more cautious when it comes to cryptocurrencies.

In October, the Central Bank of Oman (CBO) issued a stern warning to citizens to exercise caution when transacting with cryptocurrencies, citing the potential for fraud and other risks associated with the asset. The CBO has yet to license any entity to trade in cryptocurrencies in Oman, and banking laws do not cover any digital or virtual currencies and activities involving their use.

Despite the warning, many Omanis have continued to invest in cryptocurrencies. According to a recent Souq Analyst survey, approximately 65,000 residents, or 1.9% of the adult population, own cryptocurrencies in the country. The survey also revealed that 62% of locals own crypto for the long term, while 25% use digital assets for learning and education. The remaining 13% said they use cryptocurrencies for daily trading.

Also Read - Japan is Planning to Launch its CBDCs in April

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