The Sultanate of Oman and Oman’s financial regulator is moving closer to implementing its own regulations for virtual assets, including cryptocurrencies. The Capital Market Authority of Oman (CMA) has published a consultation paper seeking feedback from the public on its proposed regulatory framework for the virtual asset sector.
The framework aims to provide a platform for alternative financing and investment while mitigating associated risks.
Comprehensive Regulatory Regime for Virtual Assets
The CMA is actively developing a comprehensive regulatory regime for the virtual asset sector. The proposed framework covers various aspect. These include business requirements, market abuse prevention, and licensing requirements for virtual asset service providers (VASPs). Additionally, it addresses corporate governance, risk management, and virtual asset issuance.
The proposed framework encompasses a wide range of virtual assets, such as utility tokens, security tokens, fiat-backed and asset-backed stablecoins, and other digital currencies defined by the Financial Action Task Force (FATF). However, the issuance of privacy coins is under scrutiny, and the public’s feedback will determine whether it should be banned.
The CMA may impose certain requirements on VASPs operating in Oman. These requirements might include establishing a local presence through a legally established entity and maintaining a physical office. Additionally, minimum capital requirements might be imposed to ensure the stability of virtual asset service providers.
To enhance security measures, virtual asset firms might be required to hold only a small percentage of assets in hot wallets. Moreover, conducting regular audits of safeguarded assets and providing proof of reserves could be part of the final regulatory framework.
Seeking Public Feedback
The CMA is actively seeking input from industry stakeholders and the public regarding the proposed framework. The consultation paper includes 26 question. Interested parties can answer them to provide their opinions on various aspects of the regulatory regime. The deadline for submitting feedback is August 17, and key opinions may be posted on the CMA website.
Following the consultation phase, the CMA will analyze the feedback. Further, they will use it to finalize the regulatory framework for virtual assets in Oman. Once the framework is ready, it will be officially implemented. This will bring the country’s virtual asset industry under clear and defined regulations.
Background and Early Initiatives
The journey towards implementing virtual asset regulations in Oman began long before the public announcement. Discussions on regulating the virtual asset industry started in November 2020 when the country’s National Committee for Combating Money Laundering and Terrorist Financing initiated a task force comprising officials from the CMA and the Central Bank of Oman.
The task force was assigned to study the feasibility of permitting or banning virtual asset activities. In December 2022, consultants were enlisted to aid in the establishment of the new regulatory regime.
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