Oman sets up task force to study cryptocurrencies

A high-level task force is currently studying the complete gamut of issues encompassing the economic advantages – as well as risks – associated with any decision to authorise the use of cryptocurrencies in the Sultanate, a top official of the Central Bank of Oman (CBO) said here on Wednesday.

Tahir bin Salim al Amri (pictured), Executive President, said the breath-taking speed at which virtual assets, such as cryptocurrencies are evolving globally, is continuing to cause considerable challenges to regulators like the CBO.

“In order to firm up our policy response (to the use of virtual assets), studies are underway at the national level by a task force team consisting of members of the financial sector regulators,” Al Amri said. But he hastened to warn that, pending the apex bank’s regulatory stance on the issue, virtual assets of any kind are associated with risks.

“The Central Bank, through public notices, has cautioned the users, holders and traders of cryptocurrencies about the financial, operational and legal and security-related risks, besides the lack of customer protection mechanisms in this regard. It’s a new thing for all of us, and we have to make sure that everybody is protected before we engage into either regulating or allowing or even avoiding banning anything that may actually move the economy forward.”

The official stressed that, pending a final decision on the issue of virtual assets, the CBO has not authorised any entity to date to “operate or facilitate trading in cryptocurrencies”.

The Executive President’s latest comments on cryptocurrency came at the opening of the 2021 edition of the New Age Banking Summit, which was held at Al Bustan Palace – A Ritz Carlton Hotel on Wednesday. The forum was organised by UMS Events with the support of the Oman Banks Association (OBA).

Earlier, Al Amri commended banks and financial institutions on their “agility” in enabling the provision of banking services through digital channels in response to pandemic mitigation measures implemented by the government. At the same time, he warned banks against any complacency in the face of risks posed by new technologies that have been deployed as part of the sector’s digital journey.

“We are passing through an era of unexpected challenges and heightened uncertainties – but one of the silver linings amid these testing times has been the agility of the banking and financial industry in adapting swiftly to the evolving situations to ensure the wheels of the economy are moving and customer expectations are met,” he stated.

As social distancing protocols kept customers from visiting bank branches and outlets, the use of digital channels soared exponentially, according to the Executive President. He credited this growth to the wide array of digital options provided by the banks, ably supported by the robust infrastructure of the CBO.

But he cautioned the industry to stay vigilant amid these difficult times. “Our accomplishments should not push us into a zone of comfort. We need to be vigilant, cognisant of the technology-related risks in our digital journey, and accordingly keep revisiting the robustness of our technological infrastructure to sustain and build on the momentum,” the Executive President added.