The Central Bank of Oman recently issued a warning to the citizens of the State of Oman regarding cryptocurrencies and related products.

It is worth noting that Oman itself is not against digital currencies, but it still has to legalize digital currencies and put in place terms and laws to regulate them, as there are already blockchain-based financial transactions within the country.

Thus, the notice and warning of the Central Bank of Oman does not fully represent the position taken by the Omani government authorities.

According for reports Published by local media on July 19, cryptocurrencies have no legal representation in Oman and are not protected by law and are exposed to several risks, as quoting from some of these news reports:

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The CBO has not granted any license/authorization to any entity to deal in cryptocurrency or similar products.

Thus, the CBO does not guarantee the use, retention and trading of cryptocurrencies or similar products and are not protected by banking law.

The statement does not specifically contradict the blockchain technology itself.

Instead, it warns the public against investing in the cryptocurrency category that is not protected by the country’s financial laws.

Oman Tests Blockchain Technology:

While the authorities are urging caution with cryptocurrencies, the use of blockchain technology has been welcomed in Oman.

In November 2019, Oman Oil Group and Orpic in cooperation with HSBC Bank Oman conducted a trade finance transaction on the R3 Corda platform.

The trade included selling “polypropylene” to the Abu Dhabi National Carpet Factory.

Oman concludes first trade deal based on blockchain technology

Oman also has a national blockchain club that encourages the development of blockchain technology for different use cases.

The club was announced in November 2017 by the government official “Abdul Salam Al-Murshidi”.

A government-owned infrastructure entity called “Blockchain Solutions and Services” has also already been established.

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One of the largest banks in Oman, Bank Dhofar, has also experimented with Ripple’s technologies in digital financial payments to enable faster and cheaper cross-border payments to India.

Impact of the Corona virus on the Sultanate of Oman:

The coronavirus has affected Oman, as it has with almost every other country.

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Oman suffered from the oil price wars that took place earlier in 2020.

Standard & Poor’s has told global ratings agency that Oman will be subject to a rating downgrade if the coronavirus continues for longer than expected.

This is why cryptocurrencies, and blockchain technology and more broadly, can do a lot to inject vitality into the Omani economy.

Many developing countries view digital currencies in precisely this way, as a way to support their economies.

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