The Sultanate of Oman, nestled on the southeastern Arabian Peninsula, is making substantial strides into the realm of cryptocurrencies through recent multimillion-dollar investments. The nation, strategically positioned in West Asia, is executing a comprehensive strategy to establish itself as a digital hub in a fiercely competitive region.
In a noteworthy move this August, the Omani government unveiled investments nearing $800 million in cryptocurrency mining operations. Notably, a $300 million deal was inked with the Abu Dhabi-based Phoenix Group, aiming to establish a 150-megawatt crypto-mining farm in collaboration with Green Data City—Oman's inaugural licensed crypto-mining entity—which is slated to go live next year. Preceding this, Muscat gave the green light to a $370 million farm operated by Exahertz International, with plans to deploy an additional 15,000 machines by October.
This investment spree is heralded as a "major milestone" by Said Hamoud al-Maawali, Oman's Minister of Transport, Communications and Information Technology. It signals Oman's determined endeavor to fuel the growth of its digital economy.
Oman's cryptocurrency pursuits unfold within the broader context of the Middle East warming up to cryptocurrencies. However, they also come amidst an ongoing deliberation within the Islamic world: the compatibility of cryptocurrency with sharia principles.
Under Islamic law, or sharia, finance adheres to principles that categorize actions as morally permissible (halal) or impermissible (haram). While some Islamic scholars deem cryptocurrency as impermissible due to its speculative nature, others assert its halal status as it avoids the interest (riba) connotation present in traditional finance.
This debate over cryptocurrency's sharia compliance has prompted fatwas (Islamic legal edicts) from influential groups across the Islamic world. Turkey, Egypt, and Indonesia, for instance, have issued varied opinions on the matter.
Despite the ongoing theological discourse, Muslim-majority nations have remarkably embraced cryptocurrency adoption. A 2022 Chainalysis report identified the Middle East and North Africa as the fastest-growing crypto markets, with several Muslim-majority countries ranking among the top global adopters.
However, the regulatory landscape within the Muslim world remains diverse. Nations like the United Arab Emirates have established themselves as crypto-friendly hubs, attracting entrepreneurs globally. Conversely, countries such as Turkey allow cryptocurrency trading while imposing restrictions on its usage for payments and financial intermediaries.
As Oman navigates its burgeoning crypto ventures, it confronts the challenge of reconciling its digital aspirations with sharia principles. The tension between innovation and tradition remains palpable as the nation treads carefully to harness the benefits of cryptocurrency while ensuring adherence to its cultural and religious norms.
Oman's crypto journey mirrors the wider global struggle to strike a balance between technological advancements and ethical considerations. It stands as a testament to the intricate interplay between financial innovation and cultural values in an ever-evolving world.
