Key Insights:

• Oman’s Capital Market Authority seeks public input on its comprehensive virtual asset regulatory framework.
• The proposed regulations cover FATF-defined assets, but the issuance of privacy coins faces a potential ban.
• The consultation paper includes questions on licensing requirements, risk management, and asset issuance.

Stepping towards a more tech-oriented future, Oman is nearing the launch of its proposed regulatory framework for virtual assets. Oman’s Capital Market Authority (CMA) has drafted a comprehensive policy open for public consultation. This initiative is part of a more significant effort to provide a versatile platform for investors while safeguarding against market abuse.

Mapping Oman’s Digital Finance Future

The proposed framework, published on July 27, presents a meticulous blueprint for the virtual asset sector. It touches upon business requirements, prevention of market abuse, and several other vital areas.

In its pursuit of input, the CMA has posed 26 thought-provoking questions in the consultation paper. The feedback gathered will shape the future of the virtual asset landscape in the Sultanate. This approach reflects a critical element of public involvement, a step seen as crucial to ensuring balanced regulations.

Moreover, the authority seeks views on licensing needs for Virtual Asset Service Providers (VASPs), risk management, corporate governance, and the issuance of virtual assets. However, the conversation around privacy coins could be a thorny issue. Their allocation might face a ban, depending on the public’s opinion.

Additionally, the CMA is considering the mandate for VASPs to establish a physical office in Oman, contributing to the local economy. Implementing minimum capital requirements for virtual asset firms is another proposal.

Safety Measures in Sight

Significantly, the proposed regulations suggest limiting the percentage of assets in hot wallets. This approach will drive the demand for regular audits of safeguarded acquisitions and require firms to show proof of reserves.

The public has until August 17 to share their thoughts on these topics. Selected feedback might find a spot on the CMA website, offering a transparent overview of public sentiment.

Following the consultation phase, the CMA plans to draft and finalize the regulatory framework, inching the country closer to regulated digital asset dealings.

The initiative dates back to February 14, when the CMA first publicly announced the plan. However, the journey towards regulating the virtual asset industry in Oman started even earlier. In November 2020, the country’s National Committee for Combating Money Laundering and Terrorist Financing formed a task force. This team comprised CMA and Central Bank of Oman officials who examined the potential of permitting or banning virtual asset activities.

Consultants were subsequently brought on board in December 2022 to assist in establishing the new regime. Hence, Oman’s push towards a well-regulated digital asset market is part of a long, careful journey. As a result, it stands to benefit both issuers and investors, making the nation an attractive destination for cryptocurrency enterprises.

With Oman’s future in digital finance taking shape, the proposed regulations show promise. By embracing public feedback, the CMA ensures that its framework has the support of the people it will impact the most. Consequently, Oman could become a model for other countries looking to regulate their virtual asset markets.