Oman is developing its own digital currency, central bank official says

Central banks across the world are looking into the development of digital currencies amid the growing popularity of cryptocurrencies

Muscat, the capital of Oman. The country is developing a digital currency. Corbis

Oman's central bank is developing a digital currency and open banking services, the state news agency said.

The Central Bank of Oman is committed to supporting innovation and modernising the sector, while ensuring financial stability, the news agency reported, citing Tahir Al Amri, the regulator's executive president.

Mr Al Amri was speaking at the New Age of Banking Conference in Muscat.

No further details were provided.

Central banks are looking into the development of digital currencies amid the growing popularity of cryptocurrencies as an asset class among retail and institutional investors.

The rapid development of central bank digital currencies (CBDC) could help to boost financial inclusion and stability, but they pose a threat to banks and could weaken their ability to lend, according to Fitch Ratings.

In the Bahamas, the Sand Dollar, the local CBDC, has been in circulation for more than a year.

Sweden’s Riksbank has developed a proof of concept and is exploring the technology and policy implications of CBDC.

In China, the digital renminbi, which is called e-CNY, continues to progress with more than 100 million individual users and billions of yuan in transactions.

“There is no universal case for CBDCs because each economy is different," Kristalina Georgieva, managing director of the IMF, said in a speech at an Atlantic Council event in February.

"In some cases, a CBDC may be an important path to financial inclusion — for instance, where geography is an obstacle to physical banking."

In other instances, a CBDC could provide an essential back-up in case other payment instruments fail, such as, for example, when the Eastern Caribbean Central Bank extended its CBDC pilot to areas struck by a volcanic eruption last year.

“So, central banks should tailor plans to their specific circumstances and needs,” Ms Georgieva said.