In a recent report, the financial regulators in Oman published the “consultation paper for virtual assets regulatory framework.” The report sought to ensure that the virtual assets sector was well-regulated in Oman.
The regulators launched the consultation paper in Arabic and English version to encourage the public to provide valuable input on the proposed crypto regulation. The Capital Market Authority of Oman (CMA) report outlined the necessary business requirements and market abuse preventive measures that investors should observe to uphold compliance.
Oman Seek to Regulate Crypto
The CMA claimed the proposed regulation would support expanding the financial and investment sector. Additionally, the CMA argued that developing comprehensive law will address the risk linked to crypto assets.
The CMA has incorporated 26 questions regarding the regulation of crypto assets in which key players in the digital sector are requested to provide their comments. Besides the comment section, the regulators outlined the proposed licensing requirement for virtual asset service providers (VASPs). The consultation report has highlighted key elements in corporate governance and risk management criteria.
In addition, the market regulators confirmed that the Financial Action Task Force (FATF) will oversee the operation of several digital assets, including utility tokens, stablecoins, and other security tokens. However, depending on public comments, some tokens, including the privacy coins provided by VASPs, might be banned in Oman.
Oman to Introduce New Legislation on Crypto
Under the proposed crypto regulatory framework, the VASP will be required to set shop in Oman with the help of a well-established legal firm. The Sultanate of Oman will also need the VASP to meet the minimum capital requirement to operate as a regulated entity.
The Oman government has occasionally imposed a minimum capital requirement of OMR 150000 on foreign investors seeking to expand to the region.
Moreover, the CMA proposed that the VASP to store a minimum percentage of their assets in the hot wallet. Guided by the proposed crypto regulation, the VASP will be required to conduct regular audits for the locked assets and provide proof of reserve through public attestation.
Omanis Flouts Regulators Advices
Remarkably the CMA seeks to reverse the Oman government’s stance on crypto assets by stepping up the game to regulate the digital space. In 2020 the Omani authority legalized the use of crypto assets despite the potential gaps in regulations of virtual assets.
Since then, public agencies have explored ways to regulate the crypto sector by drafting suitable policies. According to the CMA, the public has been urged to provide significant inputs on crypto assets before August 17. The public comments will guide the CMA to revise the set regulations before publishing the final report.
Even though the CMA regulatory framework on crypto assets has faced a series of delays, the authority is nearing the official launch of the new legislation. In February, the CMA hinted at launching a regulatory oversight for crypto assets.
Race to Attain Oman Vision 2040
The CMA affirmed that the proposed regulation aligns with Oman’s Vision 2040, the main reference in economic planning. Under Oman’s Vision 2040, the regulators seek to impose policies to revolutionize the economy and welcome key financial players to the region.
The efforts made by the regulators aim at positioning Oman to become a leading crypto hub in the Middle East. On the contrary, the central bank of Oman (CBO) is still skeptical about the adoption of crypto assets.
Last year the CBO urged the public to be hyper-vigilant when transacting with crypto assets. In a consecutive advisory report, the CBO lamented that the existing banking regulations fail to cover some crypto assets.
The CBO announced that most VASPs are yet to secure the necessary licensing to offer crypto assets. Regardless of the CBO’s early warning, the Omanis have ignored the regulators advices of owning and managing crypto assets.
A recent study by a Souq analyst revealed that over 65000 Omanis own a substantial amount of crypto assets. The report demonstrated that 62% of the Omanis crypto enthusiast were long-term investors, while 25% used crypto to meet their daily needs.