Vladimir Putin recently signaled possible crypto adoption for Russia.
However, the Russian President also cited concerns with the volatility of digital assets and cryptocurrencies, saying that it was still too early to settle oil trades in digital assets.
That being said, he still signaled that Russia is aiming to replace its U.S. Dollar reserves with some sort of digital asset or cryptocurrency on a longer-term scale.
For those unfamiliar with the status of our currency, here is a concerning fact: the only reason our Dollar currently holds the coveted status of global reserve currency is due to its use as the petrodollar.
Basically, all oil trades must be settled in U.S. Dollars. Whether you are selling or buying oil internationally—you must pay, and receive payment in Dollars.
Because of this, pretty much every single country on the planet keeps U.S. Dollar reserves.
Vladimir Putin’s concerns over crypto volatility and oil trades is spot on. These assets fluctuate too wildly to serve as a way of settling oil trades, but what happens when they aren’t?
Cryptocurrencies and digital assets are fairly new, and any new asset class is going to have a fair amount of volatility present in its market, but things change.
As people continue to adopt cryptocurrencies, countries begin to recognize them as legal tender, and regulations set in, the volatility will no doubt decrease.
Knowing this, I have but one question: How long will it be before the Dollar is dethroned as the world’s global reserve currency?
Here’s more on the story:
— Vince Quill (@VinceQuill) October 14, 2021
#USD is global currency and it is at the center of all internatinal trade.
Oil reserved countries Iraq, Libya, Venezuela tried to sell oils in € instead of #petrodollar but the result was bad 4 them.
— Kadir KAYNAR 🔺️ (@0xKadirKAYNAR) September 18, 2021
Coin Telegraph reports:
The official said that MFA Russia isn’t excluding the possibility of replacing the U.S. dollar with “some digital assets” alongside other currencies:
“It’s possible to replace the U.S. dollar with other currencies, both national and regional, as well as some digital assets in the long term.”
— Crypto Mainframe (@CryptoMainframe) October 20, 2021
Bitcoin Magazine explains:
The world relies on the U.S. dollar and U.S. treasuries, giving America unparalleled and outsized economic dominance. Nearly 90% of international currency transactions are in dollars, 60% of foreign exchange reserves are held in dollars and almost 40% of the world’s debt is issued in dollars, even though the U.S. only accounts for around 20% of global GDP.
This special status that the dollar enjoys was born in the 1970s through a military pact between America and Saudi Arabia, leading the world to price oil in dollars and stockpile U.S. debt. As we emerge from the 2020 pandemic and financial crisis, American elites continue to enjoy the exorbitant privilege of issuing the ultimate monetary good and numéraire for energy and finance.