Russia May Turn To Oil-Backed Cryptocurrency To Challenge Sanctions & The Petrodollar
The gradual acceptance of digital currencies, with major exchanges about to launch bitcoin futures trading, may prompt some oil producing nations to ditch the US dollar in crude trade in favor of cryptocurrencies, an oil analyst says.
As RT reports, Russia, Iran and Venezuela have more than one thing in common.
All three are major oil producing nations dependent on the dollar since the global crude market is traditionally dominated by contracts denominated in US currency.
Moscow, Tehran and Caracas are also facing US sanctions; penalties which are proving effective since the sanctioned countries are dependent on the US dollar to sell their crude.
A decentralized currency – allowing anonymous transactions along with blockchain technology support to facilitate oil contracts – may be the ideal tool to allow the oil producing trio to turn their back on the greenback.
“The advent of cryptocurrencies, therefore, represents a fresh catalyst for commodity-producing countries wishing to abandon the dollar as a means of payment for oil,” said Stephen Brennock, oil analyst at PVM Oil Associates, in a research note seen by CNBC.
Several oil producers have already voiced plans to ditch the dollar in oil trading.
Last week, Venezuela announced it will launch its own cryptocurrency, the “Petro,” which will be backed by the country’s vast natural resource reserves.
Russia, China and Iran are currently pursuing currency swap agreements to eliminate the US dollar from trade.
One of the world's biggest crude importers, China, has also announced the launch of the petro-yuan to replace the greenback in oil transactions.
While currency swaps are being considered, cryptocurrencies, once they become less volatile, offer several advantages.
Instead of using various national currencies, they provide a common currency for countries seeking to avoid using the dollar.
They are also universal and flexible, easily convertible back to national currencies.
Cryptocurrencies provide yet another advantage to countries facing international sanctions.
They are anonymous and decentralized, which limits the effect of US economic sanctions on trade deals for countries like Russia, Iran and Venezuela.
to widen the scope of financial, economic and political information available to the professional investing public.
to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become.
to liberate oppressed knowledge.
to provide analysis uninhibited by political constraint.
to facilitate information's unending quest for freedom.
our method: pseudonymous speech...
Anonymity is a shield from the tyranny of the majority. it thus exemplifies the purpose behind the bill of rights, and of the first amendment in particular: to protect unpopular individuals from retaliation-- and their ideas from suppression-- at the hand of an intolerant society.
The right to remain anonymous may be abused when it shields fraudulent conduct. but political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.
Though often maligned (typically by those frustrated by an inability to engage in ad hominem attacks) anonymous speech has a long and storied history in the united states. used by the likes of mark twain (aka samuel langhorne clemens) to criticize common ignorance, and perhaps most famously by alexander hamilton, james madison and john jay (aka publius) to write the federalist papers, we think ourselves in good company in using one or another nom de plume. particularly in light of an emerging trend against vocalizing public dissent in the united states, we believe in the critical importance of anonymity and its role in dissident speech. like the economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker- as it should be. we believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn't.