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The Sultanate of Oman is moving closer to implementing its own virtual asset regulations, with its financial markets regulator currently seeking public comments on a proposed regulatory framework governing digital assets, including cryptocurrencies.
The Capital Market Authority (CMA) of Oman is in the process of drafting a comprehensive regime for the virtual asset sector, which includes various business requirements and market abuse prevention measures, according to the consultation paper published on July 27.
“The CMA is seeking to provide an alternative financing and investment platform for issuers and investors while mitigating the risks associated with the [virtual asset] class.”
The consultation paper includes 26 questions, allowing industry stakeholders to provide their opinions. It outlines proposals regarding regulatory and licensing requirements for virtual asset service providers (VASPs), corporate governance, risk management, and virtual asset issuance.
The proposed framework encompasses utility tokens, security tokens, fiat-backed and asset-backed stablecoins, and other digital currencies that fall under the Financial Action Task Force’s definition of virtual assets. However, the issuance of privacy coins may be banned, pending public feedback.
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The CMA may require VASPs to establish a local presence in Oman through a legally established entity and a physical office, and impose minimum capital requirements on them. If finalized, virtual asset firms might also be required to hold only a low percentage of assets in hot wallets, conduct audits of safeguarded assets, and provide proof of reserves.
The public must submit their feedback on the consultation paper by August 17, with key opinions potentially being posted on the CMA website.
Following the consultation phase for the development of the virtual asset regime, the CMA will draft and finalize the regulatory framework.
Although the CMA publicly announced the launch of a regulatory framework on February 14, discussions on regulating the virtual asset industry in Oman began much earlier. In November 2020, the country’s National Committee for Combating Money Laundering and Terrorist Financing decided to launch a task force comprising CMA and Central Bank of Oman officials to study whether to ban or permit virtual asset activities. Consultants were then enlisted in December 2022 to assist in setting up the new regime.
