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Retail_Trading_Status

Allowed-Regulated Unknown
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#446
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2025-06-26 13:02
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Executive Summary

Retail cryptocurrency trading in Oman is Allowed-Regulated, a shift from the previously discouraged but unregulated environment. The Financial Services Authority (FSA), formerly the Capital Market Authority (CMA), is establishing a regulatory framework for Virtual Assets (VA) and Virtual Asset Service Providers (VASPs). Key requirements include VASP registration, AML/CFT compliance based on Royal Decree No. 30/2016, and adherence to KYC/CDD protocols. While permitted, the CBO maintains that cryptocurrencies are not legal tender and lack protection under the Banking Law.

Key Pillars

The primary regulator is the Financial Services Authority (FSA), which replaced the Capital Market Authority (CMA) and is responsible for regulating Virtual Assets (VA) and Virtual Asset Service Providers (VASPs). Core compliance requirements include Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) obligations as per Royal Decree No. 30/2016, and Customer Due Diligence (KYC/CDD). VASP registration is currently required, with a full licensing framework under development by the FSA.

Landmark Laws

  • CMA Decision No. (E/35/2023): Issued June 2023, establishing instructions for the registration of VASPs and mandating compliance with Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) requirements.
  • Royal Decree 20/2024: Issued March 2024, establishing the Financial Services Authority (FSA), replacing the CMA and inheriting its functions, assets, rights, and obligations.
  • Royal Decree No. 30/2016 (as amended): Oman's AML/CFT law, which defines “funds” broadly to include any assets—whether movable or immovable, tangible or intangible—acquired through any means, including those in “electronic or digital” form.

Considerations

Cryptocurrencies are not considered legal tender by the Central Bank of Oman (CBO). The CBO's stance that cryptocurrencies are not guaranteed or protected under the Banking Law remains relevant for retail users, indicating inherent investment risks. Royal Decree No. (30) of 2016 on AML/CFT, as amended, defines “funds” broadly to include any assets—whether movable or immovable, tangible or intangible—acquired through any means, including those in “electronic or digital” form, thus encompassing virtual assets.

Notes

Historically, the Central Bank of Oman (CBO) issued cautionary notices starting around 2017, and reiterated in 2020 and 2022, warning about cryptocurrency risks. In February 2023, the Capital Market Authority (CMA) announced plans for a comprehensive regulatory framework. In August 2023, the first VASP registration was granted to "Easy Coins," a local startup operating since 2021. The establishment of VASP registration requirements under the CMA (now FSA) and the ongoing development of a full licensing and supervisory framework signify a move to a regulated environment. Direct CMA links may change.

Detailed Explanation

The retail trading status of cryptocurrency in Oman is classified as Allowed-Regulated. Historically, the Central Bank of Oman (CBO) issued cautionary notices starting around 2017, and reiterated in 2020 and 2022, warning about cryptocurrency risks, including volatility, fraud potential (like Ponzi schemes), lack of legal tender status, and absence of Banking Law guarantees. The CBO stated it had not licensed any cryptocurrency trading entities, leading to an Allowed-UnRegulated environment where individuals traded at their own risk. This did not represent a legal prohibition, however. In February 2023, the Capital Market Authority (CMA) announced plans for a comprehensive regulatory framework covering virtual assets (VA) and virtual asset service providers (VASPs), including crypto assets, tokens, exchanges, and ICOs. CMA Decision No. (E/35/2023), issued in June 2023, established VASP registration instructions, mandating compliance with Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) requirements. The CMA launched a public consultation on the proposed Virtual Assets Regulatory Framework in July-August 2023, seeking feedback on licensing, supervision, market abuse prevention, and risk mitigation. In August 2023, the first VASP registration was granted to "Easy Coins," a local startup operating since 2021. In March 2024, Royal Decree 20/2024 established the Financial Services Authority (FSA), replacing the CMA and inheriting its functions to continue and finalize the VA framework. Buying, selling, and holding cryptocurrencies by individuals is permitted, with activity conducted through VASPs registered and eventually licensed by the FSA, subject to regulatory oversight. Registered VASPs must adhere to Oman's AML/CFT laws (primarily Royal Decree No. 30/2016, as amended), including Customer Due Diligence (KYC), transaction monitoring, risk assessment, internal controls, appointing a Money Laundering Reporting Officer (MLRO), and reporting suspicious transactions to the National Centre for Financial Information (NCFI). Oman's AML law defines "funds" to include assets in "electronic or digital" form, encompassing virtual assets.

Summary Points

Okay, here's the conversion of the report into a clear, scannable bullet point format:

Retail Cryptocurrency Trading Status in Oman (April 12, 2025)

Overall Status: Allowed-Regulated

I. Regulatory Bodies & Roles

  • Capital Market Authority (CMA) (Historical):
    • Formerly responsible for regulating capital markets and insurance sectors.
    • Initiated the regulatory framework for Virtual Assets (VA) and Virtual Asset Service Providers (VASPs).
    • Issued Decision No. (E/35/2023) for VASP registration and AML/CFT compliance.
    • Conducted public consultation on the proposed Virtual Assets Regulatory Framework.
  • Financial Services Authority (FSA) (Current):
    • Replaced the CMA via Royal Decree 20/2024.
    • Inherited CMA's functions, assets, rights, and obligations.
    • Responsible for finalizing and implementing the VA regulatory framework.
  • Central Bank of Oman (CBO):
    • Historically issued warnings about the risks of cryptocurrencies.
    • Maintains that cryptocurrencies are not legal tender and are not guaranteed by the CBO or protected under Banking Law.
    • Does not license or authorize cryptocurrency trading entities.
  • National Centre for Financial Information (NCFI):
    • Receives suspicious transaction reports from VASPs as part of AML/CFT compliance.

II. Key Legislation & Regulations

  • CMA Decision No. (E/35/2023):
    • Established instructions for the registration of VASPs.
    • Mandated compliance with Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) requirements.
  • Royal Decree 20/2024:
    • Established the Financial Services Authority (FSA), replacing the CMA.
  • Royal Decree No. 30/2016 (as amended):
    • Oman's AML/CFT law.
    • Defines "funds" broadly to include assets in "electronic or digital" form, encompassing virtual assets.

III. Requirements for Compliance (VASPs)

  • Registration with the FSA (formerly CMA):
    • Mandatory for entities offering VA services in Oman.
  • Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Compliance:
    • Customer Due Diligence (KYC).
    • Transaction monitoring.
    • Risk assessment.
    • Implementation of internal controls.
    • Appointment of a Money Laundering Reporting Officer (MLRO).
    • Reporting suspicious transactions to the NCFI.

IV. Notable Restrictions & Limitations

  • CBO's Stance:
    • Cryptocurrencies are not legal tender.
    • Cryptocurrencies are not guaranteed by the CBO or protected under Oman's Banking Law.
  • Inherent Investment Risks:
    • Volatility.
    • Potential for fraud (including Ponzi schemes).
    • Lack of guarantees or protections.

V. Recent Developments & Changes

  • February 2023: CMA announced plans to establish a comprehensive regulatory framework for Virtual Assets (VA) and Virtual Asset Service Providers (VASPs).
  • June 2023: CMA issued Decision No. (E/35/2023) for VASP registration and AML/CFT compliance.
  • July-August 2023: CMA launched a public consultation on the proposed Virtual Assets Regulatory Framework.
  • August 2023: First VASP registration granted to "Easy Coins."
  • March 2024: Royal Decree 20/2024 established the Financial Services Authority (FSA), replacing the CMA.

VI. Key Takeaways for Retail Users

  • Buying, selling, and holding cryptocurrencies is permitted in Oman.
  • Activity is intended to be conducted through registered/licensed VASPs.
  • Users should be aware of the inherent risks associated with cryptocurrencies, as highlighted by the CBO.
  • Regulatory framework is still developing, so stay informed about changes.

Full Analysis Report

Retail Trading Status of Cryptocurrencies in Oman

Report Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Identified Current Status:

Gray-Zone

2. Detailed Narrative Explanation:

Oman's stance on retail cryptocurrency trading is currently in a transitional phase, best described as a "Gray-Zone." While not explicitly banned for individuals, the regulatory landscape is still under development, creating a degree of uncertainty. The Central Bank of Oman (CBO) has historically issued cautionary notices regarding cryptocurrency investments, emphasizing that they are not legal tender and are not guaranteed or protected by banking laws. These warnings highlight the risks associated with volatility, fraud, and lack of consumer protection.

However, there's a clear move towards establishing a formal regulatory framework. The Capital Market Authority (CMA), recently restructured into the Financial Services Authority (FSA) as of March 2024, has been spearheading this effort. In February 2023, the CMA announced plans to create a comprehensive Virtual Assets Regulatory Framework. This framework aims to cover a wide range of activities, including the issuance of crypto assets and tokens, licensing for Virtual Asset Service Providers (VASPs), crypto exchanges, and Initial Coin Offerings (ICOs). A public consultation on this proposed framework was initiated in July 2023.

As of early 2025, while the full framework is still reportedly under review and not formally finalized, some interim steps have been taken. Notably, the FSA (formerly CMA) issued Decision No. (E/35/2023) concerning the registration of VASPs and the implementation of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) requirements. This indicates that while a comprehensive licensing and operational regime for retail trading platforms is still evolving, the authorities are already focused on bringing VASPs under AML/CFT supervision.

Existing AML/CFT laws, such as Royal Decree No. (30) of 2016, are expected to apply to virtual assets, even if not explicitly mentioning them, due to the broad definition of "funds" which includes assets in "electronic or digital" form. VASPs will be required to implement robust AML/CFT measures, including customer due diligence (KYC), transaction monitoring, and reporting obligations.

Despite the CBO's warnings and the developing nature of specific crypto regulations, holding and trading cryptocurrencies by individuals has not been declared illegal. There's evidence of growing interest and even significant investment in crypto-related activities like mining within Oman, with the government showing some support for such ventures. This, coupled with the active development of a regulatory framework by the FSA, suggests a move towards eventual regulation rather than an outright ban for retail participation. However, until the comprehensive framework is fully implemented and licenses are issued, retail traders operate in an environment with limited specific legal protections and evolving rules.

The establishment of the Financial Services Authority (FSA) in March 2024, replacing the CMA, is a significant development. It is anticipated that the FSA will continue and finalize the work on the virtual asset regulatory framework, including the oversight of virtual currencies and crypto assets.

Therefore, "Gray-Zone" is the most accurate status. Retail trading is not prohibited, but it exists in a space that is not yet fully regulated with specific crypto laws, though general financial laws and forthcoming VASP regulations (especially AML/CFT) apply. Individuals engaging in crypto trading do so at their own risk, as highlighted by the CBO, while awaiting the full implementation of the new comprehensive framework.

3. Specific, Relevant Text Excerpts:

  • Central Bank of Oman (CBO) & Capital Market Authority (CMA)/Financial Services Authority (FSA) Stance and Developments:

    • "The Central Bank of Oman (CBO) has been quite clear about its position on cryptocurrencies. In a cautionary notice issued in 2020, the CBO explicitly stated that it does not recognize cryptocurrencies as legal tender. Furthermore, the bank highlighted that it had not issued any licenses or authorizations to digital asset service providers." (Addleshaw Goddard LLP, January 2025).
    • "The Sultanate of Oman is progressively shaping its regulatory framework for virtual assets and cryptocurrencies, reflecting a cautious yet adaptive approach to the evolving digital finance landscape. On February 14, 2023, the Capital Market Authority (CMA) announced its plans to establish a new regulatory framework for virtual assets and virtual asset service providers (VASPs)." (Library of Congress Blogs, January 2025).
    • "On July 27, 2023, the CMA initiated a three-week public consultation on the proposed Virtual Assets Regulatory Framework. The framework seeks to establish a comprehensive system for licensing all categories of VASPs... As of December 2024, the framework remains under review and has not been formally finalized." (Library of Congress Blogs, January 2025).
    • "The Financial Services Authority (FSA) issued Decision No. (E/35/2023), which provides instructions on the registration of Virtual Asset Service Providers (VASPs) and the implementation of requirements for combating money laundering and terrorism financing. This decision requires VASPs to register with the FSA and comply with enhanced Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirements." (Addleshaw Goddard LLP, January 2025).
    • "Effective from 25 March 2024, the RD [Royal Decree 20/2024] mandates the complete replacement of the Capital Market Authority by the newly formed FSA. ... Of particular interest will be how the FSA navigates its expanded supervisory role, including potential oversight of emerging sectors like virtual currencies and crypto assets." (BSA Ahmad Bin Hezeem & Associates LLP, March 2024).
    • "While Oman does not have specific legislation governing the use or trading of cryptocurrencies, their use is subject to the general legal and regulatory frameworks, particularly AML/CFT laws." (Library of Congress Blogs, January 2025).
    • "The Central Bank of Oman, in 2017 and 2020 statements, clarified that cryptocurrencies like Bitcoin are not legal tender but are legal to hold and trade, with users assuming risks." (Omnia Capital Group, May 2025, citing Freeman Law).
    • "As of July 2020, the Oman government's stance remains the same, the use of cryptocurrency is legal but unregulated. Holding and trading cryptocurrency is neither guaranteed by Oman's Central Bank nor protected by Banking Law No. 114/2000 as a Central Bank money." (Freeman Law, undated, referencing information up to July 2020).
    • "The proposed new regulatory framework is envisaged to cover activities such as crypto assets, tokens, crypto exchanges, and initial coin offerings, among others." (Capital Market Authority, February 2023).

  • AML/CFT Requirements:

    • "Royal Decree No. (30) of 2016 on AML/CFT, as amended, does not explicitly mention crypto assets. However... it defines “funds” broadly to include any assets—whether movable or immovable, tangible or intangible—acquired through any means, including those in “electronic or digital” form." (Library of Congress Blogs, January 2025).
    • "Anti-Money Laundering and Counter-Terrorism Financing Compliance (AML/CFT): VASPs must implement robust AML/CFT measures. These include thorough risk assessments of customers, transaction monitoring, and evaluating risks related to the nature, diversity, and complexity of the registered entity's products, services, and transactions." (Library of Congress Blogs, January 2025).
    • "The crypto sector is regulated under guidelines issued by the Central Bank and the CMA. Virtual asset service providers (VASPs) are required to implement robust AML measures, including customer verification, transaction monitoring, and the reporting of suspicious activities." (Solytics Partners, August 2024).

4. Direct, Accessible URL Links to Sources:

  1. Library of Congress Blogs - FALQs: Regulation of Cryptocurrencies in the Gulf Cooperation Council Countries – Part Two (January 15, 2025): https://blogs.loc.gov/law/2025/01/falqs-regulation-of-cryptocurrencies-in-the-gulf-cooperation-council-countries-part-two/
  2. Addleshaw Goddard LLP - Overview of Crypto in Oman (January 16, 2025): https://www.addleshawgoddard.com/en/insights/insights-briefings/2025/01/overview-of-crypto-in-oman/
  3. Capital Market Authority (now Financial Services Authority) - The Capital Market Authority announces plans to establish the Virtual Assets Regulatory Framework (February 14, 2023): https://cma.gov.om/Home/News/CMA_VA_Framework (Note: The original CMA website might be restructured under the FSA. This link was to the CMA announcement.) (Secondary link via Unlock Blockchain: https://unlock-bc.com/news/2023-02-14/oman-capital-market-authority-to-develop-comprehensive-regulatory-framework-for-virtual-assets)
  4. Financial Services Authority (formerly CMA) - Public Consultation Paper on the Virtual Assets Regulatory Framework (July 2023): https://cma.gov.om/Home/EParticipation/LegislationDrafts (Link to the consultation paper page, specific document might be within.)
  5. Carnegie Endowment for International Peace - The Future of Cryptocurrency in the Gulf Cooperation Council Countries (May 21, 2025): https://carnegieendowment.org/2024/05/21/future-of-cryptocurrency-in-gulf-cooperation-council-countries-pub-92281
  6. LeanTech SG - GCC's Virtual Asset Odyssey: Decoding Regulatory Terrain (September 19, 2024): https://leantech.sg/gccs-virtual-asset-odyssey-decoding-regulatory-terrain/
  7. Crystal Intelligence - Crypto regulation and risk in MENA: Trends, risks, and regional breakdown (June 11, 2025): https://crystalblockchain.com/news/crypto-regulation-and-risk-in-mena-trends-risks-and-regional-breakdown/
  8. Omnia Capital Group - How Oman’s Crypto Millionaires Are Driving Luxury Property Purchases with Blockchain Wealth in 2025 (May 12, 2025): https://omniacapital.group/insights/omans-crypto-millionaires-driving-luxury-property-purchases-blockchain-wealth-2025
  9. HKTDC Research - OMAN: New Regulatory Framework for Virtual Assets to Be Established (February 28, 2023): https://research.hktdc.com/en/article/MTQyNjUxNzU5
  10. Solytics Partners - Comprehensive AML Laws and Regulations: Oman (August 16, 2024): https://www.solyticspartners.com/blogs/comprehensive-aml-laws-and-regulations-oman
  11. UPay Blog - Crypto Adoption Around the World: Oman (December 11, 2024): https://upay.com/blog/crypto-adoption-around-the-world-oman/
  12. BSA Ahmad Bin Hezeem & Associates LLP (via Global Legal Insights) - Oman’s Financial Sector Transforms, Introduces Financial Services Authority (March 26, 2024): https://www.globallegalinsights.com/news/omans-financial-sector-transforms-introduces-financial-services-authority
  13. White & Case LLP - Oman establishes its Financial Services Authority pursuant to new Royal Decree (March 26, 2024): https://www.whitecase.com/news/alert/oman-establishes-its-financial-services-authority-pursuant-new-royal-decree
  14. Freeman Law - Oman and Cryptocurrency (Undated): https://freemanlaw.com/oman-cryptocurrency/
  15. Central Bank of Oman - Cautionary Notice on the Use of Cryptocurrencies (Accessible via News Archive/Search on CBO website - example of past notices): https://cbo.gov.om/ (The specific link to the 2020 notice [https://cbo.gov.om/news/194] was found within search result, users may need to navigate the CBO's news section for original releases).
  16. Arctic Intelligence - AML/CTF compliance in Oman (Undated): https://arctic-intelligence.com/aml-ctf-compliance-in-oman/
  17. Binance Square - Oman aims to capture 7% of hashrate by June 2025, switching from oil to bitcoin (September 9, 2023): https://www.binance.com/en/square/post/1107587
  18. CryptoRank - From Oil To Bitcoin: Oman Plans To Capture 7% Of Hashrate By June 2025 (Undated, referencing Mellerud's report): https://cryptorank.io/news/feed/1b730-from-oil-to-bitcoin-oman-plans-to-capture-7-of-hashrate-by-june-2025

Web Sources (19)

Sources discovered via web search grounding

Search queries used (10)
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