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The Sultanate of Oman, located on the southeastern coast of the Arabian Peninsula, is tightening its embrace of cryptocurrency after a recent round of multi-million investments this month. The West Asian nation is pursuing a strategy designed to make it a digital hub in an increasingly competitive region.
In August, the Omani government announced close to $800 million in fresh investments in cryptocurrency mining operations. On August 23, a $300 million deal was announced with the Abu Dhabi-based Phoenix Group to develop a 150-megawatt crypto-mining farm with Green Data City—Oman's first licensed crypto-mining entity—that will go online next year. Weeks earlier, Muscat approved a $370 million farm operated by Exahertz International with plans to launch 15,000 more machines by October, according to a local news report.
The investments mark a "major milestone" in Oman's work to "help accelerate the growth" of its digital economy, Said Hamoud al-Maawali, Oman's Minister of Transport, Communications and Information Technology, said in the announcement.
Oman’s recent forays into crypto-mining comes at a time when the broader region is warming to cryptocurrency. It also comes after much deliberation around a major question across the Islamic world: is cryptocurrency halal or haram?
Under Islamic law, or sharia, there are certain principles around finance that determine whether something is morally permissible (halal) or not (haram). For some Islamic scholars, the often speculative nature of cryptocurrency makes it impermissible, a view that fueled fatwas (Islamic legal edicts) issued by prominent Islamic groups in Turkey, Egypt and Indonesia, the world’s largest Muslim country.
However, others hold that cryptocurrencies can be deemed halal under Islamic law because there is no interest (riba) attached to owning tokens like Bitcoin, which would be frowned on under sharia. It is also argued that the widespread acceptance of crypto as a currency may also support the case that it is halal.
Even as the debate among Islamic scholars continues, Muslim nations have been among the biggest adopters of cryptocurrency in recent years.
According to an October 2022 report by Chainalysis, the Muslim-majority Middle East and North Africa were the fastest growing crypto markets that year. In Chainalysis’s Crypto Adoption Index, four of the top twenty adopters were Muslim-majority countries, and they were joined by states with large Muslim populations like India and Nigeria.
The regulatory landscape across the Muslim-world remains something of a hodgepodge of different rules, however. On the one hand, countries like the United Arab Emirates have been leaders in establishing themselves as attractive hubs for crypto entrepreneurs worldwide. On the other hand, there are countries like Turkey with rules allowing cryptocurrency trading, but bans using crypto for payments and from being used by financial intermediaries.