By Michael Scott
The Sultanate of Oman confirmed undertaking a multi-million investment at a time when Muslim scholars question whether crypto is compliant. The concerns over religious compliance are hardly slowing the crypto adoption within the Muslim world.
The Sultanate of Oman appears to ignore the concerns raised against cryptocurrencies within the Muslim world by concluding a multi-million investment in digital assets. The Southeastern coast country within the Arabian Peninsula targets tighter crypto embrace.
Oman Edges Closer to Regional Digital Hub
The move by the West Asian nation portrays efforts towards transforming it into a competitive digital hub. The accelerated journey began in August last year when the government allocated $800 million towards crypto mining operations.
Last week, on Wednesday, August 23, the Omani government inked a $300 million deal with Abu Dhabi-headquartered Phoenix Group. The company will develop a 150-MW mining farm alongside the Green Data City. The latter involves an Oman-based entity that is the first to secure a crypto-mining license scheduled to go online in 2024.
A local media outlet indicated that Muscat approved Exahertz International to operate the $370 million farm. The company is eyeing to unveil 15000 additional machines by October. The country’s information technology minister, Said Hamoud al-Maawali, indicated that the series of investments constitutes a critical milestone for Oman to help accelerate digital economy growth.
The data hosting and crypto mining facility would operate within the Salalah Free Zone. The location will allow the center to leverage the low corporate taxes. The local partner Exahertz is set to partner with the Dubai-based blockchain firm Moonwalk Systems.
The newly established crypto mining center involves 135 million Omani rials, translating to $350 in constitution. The project utilizes contemporary hardware from Bitmain Technologies.
The newly constructed mining center targets 15000 machines by the lapse of October 2023. The center runs under the pilot regime with only 2000 machines online. The pilot program utilizes 11 megawatts of power.
Oman Overlooks Halal Versus Haram Debate to Expand Crypto Investments
Oman’s expansion into crypto mining coincides with the period when the broader Asia region is ushering in cryptocurrency talent and projects. Oman’s initiatives come after increased deliberation on whether cryptocurrency portrays haram or halal.
The inquiry traces to Islamic law outlining several principles guiding finance transactions. The principle-based approach considers halal as morally permissible, while haram is prohibited.
Several Islamic scholars consider the speculative nature of digital assets as impermissible. The view prompted the fatwas identified as the Islamic legal edits. Besides Turkey and Egypt, the fatwas have become popular in Indonesia, the largest Muslim country.
A splitter group of Islamic scholars observes that crypto is halal since it lacks interest (riba) tied to digital assets such as Bitcoin and Ethereum. The absence of riba indicates that the cryptos do not contravene the Sharia provisions, thus halal. Also, cryptos are realizing widespread acceptance globally, thus winning the support of Islamic scholars.
Muslim World Portray Fast Growth in Digital Asset Adoption
Muslim nations are emerging as the lead crypto adopters despite the raging debate on crypto as halal or haram. A Chainalysis report released in October last year ranked the Middle East and North Africa among the fastest-growing digital asset markets.
A review of the Chainalysis uptake metric shows that four of the leading twenty countries in digital assets adoption were Muslim-majority. The list also featured states with large Muslim populations, including Nigeria and India.
Adopting cryptos would improve particularly as the Muslim world prioritizes formulating sector-specific regulations. Such is evident with the United Arab Emirates emerging as an attractive hub for global crypto entrepreneurs.
Turkey is also amending its regulatory framework to allow cryptocurrency trading. However, the country upheld the bans on crypto usage for settling payments. Also, Turkey extended the ban to avoid crypto usage by financial intermediaries.
Oman Consultation Paper Supporting Local Crypto Operations
Oman is set to accelerate the crypto adoption, assisted by the recent government efforts to develop a national crypto framework. The government had on July 27 unveiled the consultation paper to help formulate a national crypto framework.
The national framework mandates digital asset providers to establish offices within Oman. It directs the providers to hold a portion of the assets within hot wallets besides disclosing proof of reserves and auditing safeguarded assets.