Muttrah Corniche at dusk

Oman gears up for digital asset regulatory framework to control surging interest

The Sultanate of Oman could join the exclusive ranks of countries with a robust framework for regulating digital currencies following a recent announcement from its apex securities regulator.

The Capital Market Authority (CMA) disclosed that it was considering passing new rules to guide players’ operations in the local digital asset industry. The announcement comes after multiple warnings to citizens against investing in digital assets, and with 65,000 citizens already holding the asset class, the CMA believes it is time for pre-emptive action.

“The aim of this new regulation is to establish a market regime for virtual assets that include rules to prevent market abuse, including [thorough] surveillance and enforcement mechanisms,” said the CMA.

The rules, if approved, will bring activities like digital currency issuance, token custodial services, initial coin offerings (ICOs), staking, and exchange services under the direct supervision of the CMA. Furthermore, the rules will bring into operation a new licensing regime for service providers in the space, ultimately aimed at reducing the inherent risks associated with digital currencies.

The CMA enlisted the help of XReg Consulting Limited, a regulatory consultant versed in digital assets, to assist in drafting the rules. Despite the clear intent to police the industry, the CMA did not provide a date for implementing the rules but confirmed that the moves were in accordance with the country’s Vision 2040.

Oman’s Vision 2040 is an ambitious attempt by the country to rejuvenate the digital economy to be the leader in the Gulf. The Central Bank of Oman (CBO) continues to eye virtual assets with skepticism despite plans for digitalization and the steady interest of the populace in digital currencies.

The entire Gulf is marching towards a blockchain future

Oman’s plan to move toward digitization is a common theme among Gulf countries, with the United Arab Emirates, Bahrain, and Qatar nursing similar ambitions. Given the similarities of their goals, Oman’s plan to become the region’s leader faces an uphill climb.

The UAE appears to have taken the lead already with several innovations in the industry, like Dubai’s development of a sturdy regulatory regime and its experimentation with the metaverse. Furthermore, several global blockchain technology firms are already setting up operations in the UAE to serve the entire Middle East.

Saudi Arabia’s recent partnership with the Sandbox indicates an impending move into the metaverse, while Bahrain continues to mirror the UAE’s actions to open its doors to more global players.

Watch: BSV in the Middle East

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