According to reports, the world’s largest oil exporter, Saudi Arabia, may be affected by the supremacy of the US dollar (USD) to benefit from Bitcoin and other global currencies. During the World Economic Forum (WEF) in Davos, the country’s finance minister, Mohammed Al-Jadaan, signaled the possibility of accepting non-dollar currencies for oil trade.
Since the 1970s, Saudi Arabia has agreed to the price of oil in US dollars, giving this currency and the country an advantage in the world. This system is known as the “Petrodollar,” and is part of the machinery that supports the global reserve currency status of the dollar.
The New World Order, What Role Does Bitcoin Play In It?
Al-Jadaan claimed Saudi Arabia reopened this agreement as it strengthened its relationship with the world’s largest oil importer and US rival, China. During WEF, government officials stated the following, opening a Pandora’s Box that could affect the market for years to come:
There is no problem with discussing how to complete trade arrangements, whether in US dollars, whether in euros, whether in Saudi riyals. I don’t think we are ignoring or rejecting discussions that will help improve trade around the world.
According to the report, China is moving forward to accelerate changes in the global currency status of the US dollar. The Asian giant offers partners access to the Shanghai Petroleum and Natural Gas Exchange, a platform that operates with the Chinese Yuan.
In 2022, the Petrodollar system was questioned by Arthur Hayes, the founder of the BitMEX crypto exchange. According to a report from our sister website, NewsBTC, Hayes believes that this system is undermined by the sanctions imposed by the International Community on Russia. The founder of BitMEX said in 2022:
Now add the news that Saudi Arabia is considering accepting Yuan instead of Dollars for Chinese oil and you have an accelerator for economic problems and market uncertainty.
In addition, the Petrodollar system is being undermined by China and its allies trying to gain trade leverage and undermine the multidecade system. In this new scenario, countries will seek neutral currencies, such as Gold and Bitcoin, as the dollar loses strength. Hayes:
A new neutral reserve asset, which I believe will be gold, will be used to facilitate global trade in energy and food. From a philosophical point of view, central banks and authorities respect the value of gold, but not Bitcoin (…). Bitcoin is less than two decades old. But don’t worry: as gold is successful so is Bitcoin.