- Oman’s Capital Market Authority is inviting public opinions on its proposed regulatory framework for virtual assets.
- The proposed regulations could potentially ban the issuance of privacy coins, subject to public feedback.
Oman’s journey towards formalizing its own regulations for digital assets is progressing, with the country’s financial markets regulator inviting public feedback on its drafted regulatory framework governing digital assets, including cryptocurrencies.
An Inclusive Approach to Regulation
The Capital Market Authority (CMA) of Oman is presently crafting a well-rounded framework for the digital asset sector. The plan, as unveiled in a consultation paper published on July 27, covers diverse business requirements and aims to mitigate market abuses.
“The CMA is working to establish an alternative platform for financing and investment for issuers and investors, while minimizing the risks associated with the virtual asset class,”
the regulator shared.
The consultation paper, featuring 26 questions, opens the floor for industry stakeholders to express their viewpoints. It encompasses regulatory and licensing requirements for Virtual Asset Service Providers (VASPs), corporate governance, risk management, and virtual asset issuance.
The proposed framework covers a broad spectrum of digital currencies, including utility tokens, security tokens, fiat-backed and asset-backed stablecoins, and other digital currencies that align with the Financial Action Task Force’s (FATF) definition of virtual assets. However, it also brings to light the possibility of banning the issuance of privacy coins, a decision hinging on public opinion.
The CMA might also mandate VASPs to maintain a local presence in Oman via a legally established entity and physical office. Additionally, it may impose minimum capital requirements. If the regulations are finalized, digital asset firms could be obliged to store only a limited percentage of assets in hot wallets, conduct audits of safeguarded assets, and demonstrate proof of reserves.
The deadline for submitting feedback on the consultation paper is set for August 17. Significant opinions might find a place on the CMA’s website.
The CMA’s public announcement about the launch of a regulatory framework came on February 14, although the conversation around regulating the digital asset industry in Oman began much earlier. In November 2020, the National Committee for Combating Money Laundering and Terrorist Financing launched a task force, composed of CMA and Central Bank of Oman officials, to deliberate on whether to permit or prohibit digital asset activities. Subsequently, consultants were employed in December 2022 to support the establishment of the new regime.
