Cryptocurrency Regulation in Oman Prior to 2024

Prior to 2024, Oman’s approach to cryptocurrency regulation was evolving to adapt to the growing interest in digital assets among its residents. The Sultanate’s financial market regulator, the Capital Market Authority (CMA), undertook significant steps to establish a regulatory framework for virtual assets.

Emerging Regulatory Framework

Capital Market Authority’s Role: The CMA announced plans to introduce a comprehensive set of rules for virtual assets. This framework aimed to provide oversight of digital asset activities, establish a licensing procedure for virtual asset service providers (VASPs), and implement a system to identify and mitigate risks associated with these new asset classes. The proposed rules covered various aspects of digital assets, including the issuance of crypto assets, tokens, initial coin offerings (ICOs), and the operations of crypto exchanges​​.

Collaborative Efforts: In drafting the new regulatory framework, the CMA collaborated with entities like XReg Consulting Limited and an Omani law firm, Said AlShahry and Partners. This collaboration indicated a thorough and well-considered approach to the emerging sector of digital assets​​.

Central Bank of Oman’s Position

Cautious Stance: The Central Bank of Oman (CBO) maintained a cautious stance towards crypto asset investments, advising citizens to be vigilant due to the inherent risks associated with virtual assets. Despite not having licensed any company for trading digital assets, the CBO did not cover digital assets and their related activities under the existing banking laws​​​​.

Public Interest in Cryptocurrencies

Growing Popularity: Despite the CBO’s warnings, there was a notable interest in cryptocurrencies among Oman’s residents. A survey revealed that over 65,000 residents, or about 1.9% of the adult population, owned digital assets. A significant portion of these individuals viewed crypto assets as long-term investments, with Bitcoin being the primary digital token of interest. Additionally, a considerable number of residents were engaged in daily trading and using virtual assets for educational purposes​​.

Conclusion

Before 2024, Oman was on the cusp of a significant shift in its approach to cryptocurrency regulation. The efforts by the CMA to establish a new regulatory regime for digital assets, combined with the public’s growing interest in cryptocurrencies, indicated a movement towards a more structured and regulated digital asset environment in Oman. This evolving landscape reflected a balance between regulatory oversight and the burgeoning interest in and use of cryptocurrencies among the Omani population.