Saudi Arabia did not renew oil-dollar trade agreement. Opportunity for Bitcoin? – DiarioBitcoin

The decision recently made by the Saudi government, hand in hand with the decisions of Russia and other nations, could mark a paradigm shift in the oil market against the US dollar. Could there be an opportunity for Bitcoin?

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• Saudi Arabia did not renew agreement to trade oil for dollars
• The measure constitutes a serious blow to the US currency
• There are also tensions due to the measures taken by the Russian government
• The alliance BRICS is approaching the launch of a new payment system
• Could Bitcoin find business opportunities under this scenario?

Saudi Arabia, a nation that appears as one of the main oil exporters in the world, decided this week not to renew a 50-year-old agreement signed with the United States, which established that the commercialization of this asset would only be would be carried out with the North American currency.

Historic measure in the oil market

The agreement in question, originally signed in 1974, formally expired on June 9, which opens the possibilities for Saudi Arabia to now be able to market its oil in multiple currencies, including euros, yen, yuan and even rubles. something that could threaten the supremacy of the US dollar as a world reserve currency.

According to specialized media, although the agreement formally expired this week, Saudi Arabia has been allowing other nations to trade oil with alternative currencies since 2022. The most notable case was with China, one of the country’s main buyers, which began to pay part of the corresponding payments in yuan, to which other reports add that they are possibly considering the possibility of using the CBDC developed by the Asian country, given that they collaborate in cross-border tests.

Although the measure in itself is notable, today the Moscow Stock Exchange announced that starting tomorrow it will stop accepting negotiations with dollars and euros, coinciding with the introduction of a new package of sanctions by the US government towards Russia, which seeks to limit the amount of money entering and leaving the Soviet nation. .

Danger for the dollar? Opportunity for BRICS?

What seems to be clear is that the measure taken by Saudi Arabia could have strong repercussions on the North American currency, which has been functioning as a reserve currency for a large number of countries, and on which eyes are currently focused at a rate of the economic situation of the nation.

As detailed by several analysts on social networks, the fact that the dollar loses this exclusivity in the oil market could force the US government to print a greater amount of money in the face of the resulting pressure. This phenomenon could lead to an increase in inflation that is being controlled, so it is advisable to look closely at the decisions that will be made in the coming days.

An element that sounds very strong in the market although it is not yet available is the alliance BRICS, which is based on the development of an independent payment system that could employ Blockchain and be backed by gold, appearing as an alternative to the US dollar in international transactions.

One of the main drivers behind this initiative is the Russian government, headed by Vladimir Putin, who highlighted last week during his speech at the St. Petersburg International Economic Forum (SPIEF) 2024 the growing distrust in Western payment systems:

“Trust in Western payment systems has been fundamentally undermined by these same countries“, he stated, claiming that the share of the ruble in international payments has tripled since 2021, reaching 40%, so “BRICS have great potential to attract new members“.

The president stressed the importance of an autonomous payment infrastructure within BRICS, the block of countries made up of Brazil, Russia, India, China and South Africa. “We are working on the formation of an independent payments system within BRICS, not subject to external pressures“he assured.

Opportunity for Bitcoin?

If the case were as just detailed, analysts and followers of the topic highlight the need to look for safe haven assets in the event of a rebound in inflation. This is where alternatives come in like Bitcoin, which has been reacting very positively in the main markets, a movement also boosted by the demand that the ETFs based on the digital currency in the US market in recent weeks.

On the part of Saudi Arabia, the nation has constantly been at the center of rumors related to investments in Bitcoin. In fact, its regional neighbor, the United Arab Emirates, appears as one of the nations with the highest crypto adoption, since a recent study indicates that 72% of its citizens have made investments in the sector.

At the moment it is not clear whether the Saudi government contemplates Bitcoin as a valid alternative for oil trading, but it is not out of the question given that the digital currency currently enjoys greater reputation and legitimacy.

In short, the possibility of Saudi Arabia selling oil for cryptocurrencies or a gold-backed currency introduces a new paradigm in international trade, opening opportunities for other countries to explore alternatives to the dollar within the hydrocarbon market.

Article by Angel Di Matteo / DailyBitcoin

Image from Depositphotos

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