Oman is currently working on its first digital currency. This comes after stern warnings for its people to stay away from cryptocurrencies in general.
Oman Taher bin Salem al-Omari is the CEO of the Central Bank of Oman. He has announced that work on an Omani digital currency is continuing. The announcement came at the opening of the “New Age of Banking” conference in Muscat.
Al-Omari said the CBO is committed to providing innovative support and services that will modernize the financial sector, in parallel with ensuring financial stability.
In Oman, cryptocurrencies have been a cause for concern and suspicion. The reasons given include that they are surrounded by high risks of fluctuating value, as well as concerns about their use in piracy and cyber fraud. But this has changed recently as the world of digital technologies in the Gulf has moved forward.
Oman: Investing in innovative technologies
The CBO CEO noted the importance of investing in innovative technologies and human capital to meet cybersecurity challenges.
Al-Omari said technical developments have contributed to a dramatic change in financial services, both in terms of products and design, and services. This is especially as digital transformation accelerated during the COVID-19 pandemic, specifically in payment and settlement systems.
Point-of-sale transactions in Oman are estimated to have increased from 24 million to 115 million in the past five years. This is while e-commerce transactions have increased from 0.3 percent in 2017 to about 32 million by the end of 2021.
A large number of central banks around the world are moving to issue their own digital currencies.
While authorities have been urged people to be careful of cryptocurrencies, the use of blockchain technology has been welcomed in the country.
Dhofar Bank, one of Oman’s largest banks, has already experimented with Blockchain technology using Ripple’s RippleNet technology to enable faster and cheaper cross-border payments to India.
For central banks in emerging markets, a key driver for developing CBDCs is that it provides opportunities to bring underbanked communities into the financial system. It can also improve the cost and speed of payments.