The Capital Market Authority (CMA) of Oman is currently working on regulations for crypto assets, a move that underscores the GCC’s warm reception of digital assets, and the regulator’s proactive fintech direction.
“We are going to be regulating all digital assets in Oman except for the payment system as the payment system is under the purview of the central bank,” revealed Kemal Rizadi Arbi, an expert/advisor with the CMA, at the IFN Oman Forum 2022. “We hope to get something out by the end of the year.”
The framework will cover the introduction of crypto assets, non-fungible tokens, crypto exchanges and initial coin offerings among others.
Once the regulations are introduced, Oman will join its regional peers in their embrace of virtual tokens at a time when some 50 markets have turned away from the asset class, signifying the conflicting attitudes toward cryptocurrencies.
Countries such as China, Algeria, Tunisia, Egypt, Morocco, Bangladesh and even Qatar have banned cryptocurrencies. On the other hand, the GCC’s largest economies are leading the way in adopting virtual currencies in one form or another.
The UAE, for example, just recently completed the first pilot of central bank digital currencies (CBDCs) with its counterparts in Hong Kong, Thailand as well as the Digital Currency Institute of the People’s Bank of China and the Bank for International Settlements. It also has in place regulations on virtual assets and set up the Virtual Assets Regulatory Authority early this year in an attempt to court blockchain and crypto entrepreneurs.
It also in 2019 began a one-year project with Saudi Arabia to explore whether distributed ledger technology could enable cross-border payments. Dubbed Project Aber, which was completed in 2020, both countries weighed the possibility of the issuance of a new dual-issued digital currency as a unit of settlement between commercial banks in the two jurisdictions as well as domestically.
The Saudi Central Bank (SAMA) has also been very proactive in this space: just last month, SAMA hired ex Accenture managing director, Mohsen AlZahrani, to lead its CBDC and virtual assets initiative. Bahrain continues to influence the narrative being the first to regulate virtual assets.
It is understood that Central Bank of Oman (CBO) is also developing a digital currency. Along with the CMA, CBO too has been doubling down its digitalization efforts. It is looking at open banking and last year introduced a regulatory sandbox to promote digital innovation.
“The world is moving toward digitalization – there are a lot more central banks looking at issuing CBDCs on their own. That’s the next step we need to actually take after the last 10 years [of Islamic finance development in Oman], especially to enhance financial inclusion, because at the end of the day, Islamic finance does not exist in isolation,” Kemal opined.
The CMA, according to Kemal, would also be introducing a sandbox for the capital market and insurance sector.