Topic: Could this be a ploy by Saudi Arabia to explore the crypto market ? (Read 196 times)

From what I can see in the news they just said they are willing to accept payment methods other than the US dollar for international trade which means any other currency other than the US dollar, this includes euro, ruble, etc... Maybe I'm wrong but this won't be guaranteed to say bitcoin and other cryptocurrencies will be used for international trades in Saudi Arabia because the number of their international businesses and the value if very high so I'm not sure if bitcoin will be able to o the job for them.

The news is true, but not Saudi Arabia. Three days ago, it was announced that Binance will support Bahrain by obtaining an activity license, which allows users in Bahrain to link their bank accounts to the platform and get access to Binance’s range of regulated products and services.
https://www.arabianbusiness.com/industries/banking-finance/crypto-exchange-giant-binance-launches-in-bahrain
It is noteworthy that Bahrain is the first country in the Arab region to support crypto since Rain supported it. And after the Emirates joined the wave of adoption, it is expected that Saudi Arabia will follow, as it is a major economic partner for it. And why not the rest of the GCC countries.

The global economic market is very competitive. This has made different nations devise various means of outsmarting competitors. Bitcoin and others are viable alternative sources of payment that give a nation an edge over others. One of the beauties of bitcoin is that it is stateless which means that it is not issued or controlled by any government. This attribute makes it a neutral universal currency that can be used in international trade. Russia or Iran might not want to trade with the dollar because of the face-off they have with the US but they can comfortably trade with bitcoin.

The Saudi-US relationship has not been cordial because of the murder of Jamal Khashoggi and some other misrule by Mohammed bin Salman Al Saud, the crown Prince. The Saudi government is gradually withdrawing its alliance with the US because they feel they are not getting the right attention.  The government of Saudi Arabia is not unfriendly to bitcoin because the currency is not facing any ban in that nation. There are bitcoin ATMs and some exchanges operate freely in that country. Saudi Arabia is the leading force in the Arab World. Other Arab nations are directly or indirectly influenced by the policies of Saudi Arabia. Choosing bitcoin as a payment option in trade would have a positive effect on the bitcoin market.     

this is my thoughts on this. when they say accept other currencies, it doesn't mean they are referring to btc. high likely that they are referring to fiat currencies like Euro or CNY or other top fiats.
as mentioned in some of the links provided above, CNY or EUROs are their other preferences. there's no mention of BTC. so don't know where the OP is coming from with his deduction of this situation?

This has zero to do with crypto and more to do with diversifying their currency holdings away from the US dollar as others have said. It can be hard to comprehend the figures involved, but cryptocurrencies simply cannot cope with the volumes of trade that are taking place at a global level. It needs to be comfortable with carving out a niche in something like the exchange or remuneration market, i.e. avoiding large bank fees to transport funds across borders and allowing overseas workers to send money back to their family while paying minimal commission to middlemen. Saudi is also definitely not a pioneer of freedoms so you should be more concerned than happy if they decide to follow the crypto route.

This, i guess has little to do with crypto currencies its just that as at 2021 the chinese government were the highers buyers of crude oil and they demand to trade with yuan and the saudis are okay with it for now just for business purpose though major decisions like this can indirectly influence the crypto space but its not directly applicable

The entire middle East is now trying to come out of the devil grip of US. I won't be surprised if crypto as an alternative is actively being discussed. But it's highly unlikely to become a reality. The simple reason is it's volatility. For a country who are solely dependent of the sales of oil and natural gas, won't gamble on such highly volatile asset.

Most probably the OPEC plus countries will go ahead with a multi currency setup in future where major economies will be granted allowance to use their own currency to purchase oil and gas from Saudi Arabia. Let's hope it happens and let's hope US doesn't wage another war on this issue!

Saudi Arabia is a rich country and has the right to determine the payment method they want as long as it does not conflict with the rules of their own country and this could also have a good impact on the crypto market because maybe Saudi Arabia is also very happy with crypto assets like Bitcoin .

After all, Saudi Arabia itself has also emphasized that this is not a problem for them in the international trade that they are doing, so this will certainly provide a very good opportunity for Bitcoin if Saudi Arabia wants to accept payments in Bitcoin.


Reference:

• https://oilprice.com/Energy/Energy-General/Saudi-Arabia-Is-Open-To-Discuss-Non-Dollar-Oil-Trade-Settlements.html
• https://www.businesstimes.com.sg/international/saudi-arabia-says-it-not-bound-us-dollar-trade
• https://www.bloomberg.com/news/articles/2023-01-17/saudi-arabia-open-to-talks-on-trade-in-currencies-besides-dollar?leadSource=uverify%20wall
• https://www.wsj.com/articles/saudi-arabia-considers-accepting-yuan-instead-of-dollars-for-chinese-oil-sales-11647351541

This isn't about cryptocurrency. This isn't about Bitcoin. Bitcoin isn't the only currency out there besides the US dollar, so when Saudi mentions the possibility of accepting other currencies for international trade, it may refer to the Chinese yuan or Euro but not Bitcoin. Chinese yuan more particularly since the country's relationship with the US seems souring and with China blossoming. There is indeed a big possibility that Saudi's oil trades with China and other countries whose necks are held by China would choose to transact with renminbi rather than the US dollar.

Its an important change either way because middle eastern oil being traded in US dollars is quite a large part of its backing as a global reserve asset.    I dont know Saudi would trade crypto but even so a weakening of US dollar generally means alternatives are more readily accepted and used.    Its happened before in the 1980's the alteration to US dollar exchangeability to gold in the 70's meant by the 80's it was putting silver as consideration as a replacement standard.     If that possibility was at least considered briefly it could happen again that major countries are unsatisfied with Dollar performance long term.

Am not surprised that Binance managed to pull this off when we least expected it!
But then if you remember, during the just ended worldcup Binance themselves ran Cristiano Ronaldo NFT ads during the competition and now Saudi Arabia have their target man as their ambassador who they have put to help them win a bid to host the next worldcup ...Everthing seems to have played out well, talk about opportunity unraveling right in front of our eyes... Killing 2 birds with one stone, well played Binance ,I suppose they had this planned out all along

I think they just realize that the USD will not be reliable forever, hence they are open to accept other national currencies for their foreign trades, and that's not a bad thing if you're looking to diversify the currencies you hold for a better chance against future economic meltdowns. But this does not necessarily mean that they're keen in using crypto. These oil states can honestly last for a couple more decades hoarding a lot of wealth in exchange for their oil, and they could shift into other source of wealth before then, and I don't see bitcoin or any other crypto fulfilling that goal for them honestly.

They recognize the wealth produced from oil will not last forever. Real estate development in dubai UAE being part of their comprehensive strategy for life beyond peak oil. Naturally, if crypto appears to carry a potential for post oil prosperity, they will also be likely to embrace it.

It is possible that the FTX scandal opened a lot of eyes to the wealth and prosperity crypto can produce. Considering what crypto did for SBF. Imagine what it could do in the hands of others. Having millions of spare cash to throw at ape NFTs, clothing lines, and whatever other random projects FTX funded. It has to attract ambitious and wealthy personalities looking for the next big thing.

There could be another motive for saudi embracing crypto. As inflation hits many global economies, many are seeking assets which could serve as stablecoins for large transactions involving things like energy and oil. We have seen this with ghana seeking to denominate oil transactions in gold to insulate itself from inflation decimating FOREX exchange rates. It is possible that saudi arabia will explore the potential to denominate oil transactions in gold or perhaps even crypto, if it appears to be a worthwhile pursuit. Who can say what their motives or plans are.

No, as it has nothing to do with cryptos and it wasn't about that in the first palce!


Which ones?

I live near Saudi Arabia and I have acquaintances with many economists, and I can assure you that they have zero plans regarding encryption. What the article tries to narrate is Saudi Arabia’s attempt to sell part of the oil in Chinese yuan, because the volume of oil exchange (the largest buyer of oil) is China, but this risk has It affects the global economy because the dollar is its currency because of the term petrodollar.

In general, I do not expect it to develop into more than buying some bonds.

Some few days ago, I was reading on the news that the Saudi government have given binance license to operate as a full fledged crypto asset exchange.
Now I am not 100 percent sure if it was Saudi or some other country in that news, but if it be, I would say that this is definitely positive on bitcoin and cryptocurrencies.
Alot of countries are beginning to see the benefit of cryptocurrencies and I believe that in no time, many of them will be adopting the blockchain technology as well as crypto payment system into their mainstream payments systems.

UPDATE: I think it's Sweden I saw, not Saudi, I was probably mistaken, I am sorry for the misinformation - https://remitano.com/news/125382-binance-registers-in-sweden-alongside-other-expansion-and-hiring-efforts?

Saudi Arabia asserts that it is willing to accept payment methods other than the US dollar for international trade.
So could this be a comparative advantage for the crypto market?

https://www.[]business/energy/davos-2023-saudi-arabia-says-open-to-settling-trade-in-other-currencies-1.93268195