The head of the Central Bank of Oman states that “cryptocurrencies are neither a currency nor a means of payment”
Tahir bin Salim Abdullah Al-Amri, President of the Central Bank of Oman, stated that the governance of cryptocurrencies is fraught with risks and that investors need to be careful in dealing with the asset.
Local digital media, Oman Observer, also reported that Al-Amri spoke at a panel discussion held on February 20 at the Youth Center in Muscat, to talk about recent financial technology developments in the country. Al-Amri defined cryptocurrencies as an asset that is not recognized by the Central Bank of Oman. Like many central banks around the world. where he said:
“(Cryptocurrency) is an asset that we do not recognize as a currency in (CBO), like many central banks around the world as a currency.”
The head of the central bank further noted that cryptocurrency is “not a means of payment” and is seen as a “commodity or asset” that is primarily traded for capital gains.
The CBO chief added, “We also find that the governance of cryptocurrencies is very risky, so we always warn people who deal with them, telling them that the central bank has no responsibility for that.”
Amidst the prevailing caution, the Omani Water and Sewerage Services Company (OWWSC) signed a deal with Easy Coins in September 2022, to pilot payments using a cryptocurrency pegged to the value of the Omani Rial.
Although Al Ameri warned about the risks of investing in cryptocurrencies, he made it clear that the Central Bank of Oman remains cautiously receptive to the idea of exploring virtual assets.
“Central banks and regulators around the world are looking at cryptocurrencies with an open mind, but we are also institutions that need to minimize potential risks, so for the time being, we view it as a very risky product.”
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Recently, the Capital Market Authority (CMA), the regulator of financial markets in the Sultanate of Oman, announced its plans to create a regulatory framework for the virtual asset industry in the Sultanate. The proposed guidelines will include oversight of virtual asset activities and the licensing process for Virtual Asset Service Providers (VASPs), as well as new rules to identify and mitigate risks surrounding cryptocurrencies.
According to Al-Omari, the Central Bank of Oman is involved in creating and developing this regulatory framework.
In addition to the above, the Central Bank of Oman announced the development of a digital currency last year, as it looks to support innovation in the country’s financial sector; “We have already participated in a specialized forum to help us look at the pros and cons of the subject and its applicability,” Al-Omari said during the session. The report said a decision would be made by the end of the year.