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Oman to create a regulatory framework for virtual assets

Oman to create a regulatory framework for virtual assets

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The Capital Markets Authority (CMA), the regulator of the financial markets in Oman, wants to create a new regulatory framework for the virtual assets industry in the Sultanate.

According to a Feb. 14 press release, the new rules would include oversight of virtual asset activity, a licensing process for virtual asset service providers (VASPs), and a framework to identify and mitigate risks associated with the 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, including (thorough) monitoring and enforcement mechanisms.”

Several virtual asset activities under the proposed policies include issuance of crypto assets, tokens, crypto exchange products and services, and initial coin offerings, among others.

XReg Consulting Limited, a virtual asset policy and regulation consultant, and Said Al-Shahry and Partners, Advocates & Legal Consultants (SASLO), an Omani law firm, have been retained to advise and assist CMA in drafting the new regulation.

Financial market regulators said the proposed regulatory framework is in line with Oman’s Vision 2040, an initiative to digitally transform the country’s economy while attracting global players to Oman.

While Oman aims to position itself as a leader in virtual asset adoption in the Middle East through the proposed regulator, the country’s central bank appears to be more cautious when it comes to cryptocurrencies.

Related: The UAE Central Bank to issue CBDC as part of its financial transformation program

In October, the Central Bank of Oman (CBO) pushed Citizens to exercise caution in cryptocurrency transactions given the risks of fraud surrounding the asset.

In repeated notices, CBO warned that it is not yet required to license a company to trade cryptocurrencies in Oman and that foreign exchange banking laws do not cover digital or virtual currencies and activities involving their use.

However, the warning did not stop Omanis from owning and investing in the asset. According to the latest survey by Souq Analyst, about 65,000 residents or 1.9% of the adult population in the country own cryptocurrencies.

The study found that 62% of locals own crypto long-term, while 25% said they use digital assets for learning and education. The rest said they use cryptocurrencies for day-to-day trading.

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