The gradual acceptance of digital currencies may prompt oil producers like Russia to ditch the US dollar in crude trade in favor of cryptocurrencies.
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.