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Oman to establish regulatory framework for virtual assets

The Capital Market Authority (CMA), which oversees Oman's financial markets, is working to create a new legal framework for the Sultanate's virtual asset market.

The proposed regulations would include oversight of virtual asset operations, a licencing procedure for virtual asset service providers (VASPs), and a framework to detect and reduce risks related to the new asset class, according to a news release from February 14. The statement says:

“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.”

The proposed guidelines cover a number of virtual asset operations, such as the release of crypto assets, tokens, products and services for cryptocurrency exchanges, and initial coin offerings.

The CMA sought the advice and assistance of XReg Consulting Limited, a virtual assets policy and regulatory consultant, and Said Al-Shahry and Associates, an Omani law firm, in crafting the new laws.

The proposed regulatory framework, according to the financial markets authorities, is in line with Oman's Vision 2040 project, which aims to digitally modernise the nation's economy while luring international players to Oman.

The country's central bank seems to be wary about cryptocurrencies, even if Oman seeks to establish itself as a pioneer in the Middle East in terms of the adoption of virtual assets.

Given the dangers of fraud, the Central Bank of Oman (CBO) advised citizens to use caution in October 2022 when doing cryptocurrency transactions.
The CBO has repeatedly issued warnings warning that no business has yet received a licence from it to trade cryptocurrencies in Oman and that Oman's currency banking rules do not apply to any digital currencies or the activities associated with their use.

Omanis continued to own and invest in digital assets despite the warning. Over 65,000 citizens, or 1.9% of the adult population, possess cryptocurrencies in the nation, according to a recent Souq Analyst poll.

According to the poll, 25% of residents stated they use digital assets for learning and education, while 62% claimed they have long-term crypto holdings. The remainder claimed to trade cryptocurrency on a daily basis.

February 2023, CryptoniteUae