DAVOS, Switzerland Most Middle Eastern elites at the World Economic Forum are highly skeptical of bitcoin, but there are whispers about its potential for cross-border settlements in the energy sector.
According to Egyptian businessman M. Shafik Gabr, chairman of the ARTOC Group for Investment & Development, some Middle Eastern nations are already exploring the possibility of settling oil contracts in bitcoin. But he declined to specify which, and most of the leaders gathered in Davos for the annual conference that wrapped up Friday are adamant they see bitcoins post-sovereign nature as anathema.
Fellow Egyptian investor Ahmed Heikal, CEO of Qalaa Holdings, said hes not bullish on bitcoin because it doesnt have the legal framework for such wholesale deals. If nations or energy enterprises are to use bitcoin, he argued, it wont be for at least another decade.
Delegates from Oman to the United Arab Emirates and Saudi Arabia all expressed similarly dismissive views about bitcoin as an asset, often referring to it as a gambling conduit. But when asked if it could still be used to settle oil contracts especially considering the United States aggressive economic pressure on energy exporters Iran and Iraq one Omani politician, who did not want to be identified, teased, It depends on who's asking.
U.S. sanctions are top-of-mind across the region, as when President Donald Trump urged Europe not to trade with unfriendly energy suppliers. Iraqi President Barham Salih pushed back with a speech on Wednesday that asserted it was Iraqs sovereign right to have relations with neighbors on its own terms.
Saudi Arabian businessman Hamza Alkholi, CEO of Al-Kholi Group, dismissed the idea that bitcoin-denominated oil contracts could ever be more than an outlier.
Weve been trying for 30 years, he said, referencing efforts to move beyond the U.S. dollar by settling oil contracts in euros. Until bitcoin is regulated like the stock market, I dont see that happening.
Crescent Enterprises CEO Badr Jafar, who is heavily invested in the oil and gas industry, agreed theres no urgency among most players in his industry to move away from the dollar. Leaders and businessmen still dont trust cryptocurrency, Jafar said, and he expects central banks would push back if bitcoin gained more significant usage.
However, if oil contracts were to be settled in currencies beyond the dollar, Jafar said that might be driven by political factors related to Russia and China.
And soon there will be a digital currency issuer eager to help dollar-weary energy suppliers find alternative settlement systems. Equally concerned about trust, China is hyper-focused on both compliance and global market opportunities.
China's new Silk Road?
Chinese businesspeople see Eurasian crypto ventures as a stepping stone toward addressing more complex commodities markets.
China Blockchain Delegation Chairman Danny Deng said Chinas blockchain-based currency, which he expects the Peoples Bank of China (PBoC) to launch on a limited scale in 2020, could offer a backbone for energy markets.
Bitcoin has a larger and larger ecosystem, but it still cant afford the trading volume of such a commodity, Deng said. The traders of oil and gas are using leverage. That leverage must be backed by financial systems. Regions, like Iran may use bitcoin or other payment systems. But other countries that dont have this problem may play an important role in national [cryptocurrency] settlements.
From his perspective, fiat currency has become too political, rather than a strictly commercial tool. One of Chinas most revered bitcoiners, Wang Wei, a leader of nearly a dozen associations from the Shanghai Stock Exchange Corporate Governance Advisory Committee to the China Mergers and Acquisitions Association, said bitcoin lost its chance to be the dominant currency for settlements and will instead primarily be a store of value.
Several Chinese businessmen who work with the government and PBoC agreed the bank could offer an alternative to dollar settlement systems by 2021. For example, Zhang Shousong, secretary general of the China Blockchain Application Center, said by the next Davos conference PBoCs digital currency will be operational not only in China, but all over the globe.
Given the tenor of public officials statements, Deng said cryptocurrency rails are on a fast track. Shousong added its not like Libra, its certainly going to launch, referring to the Facebook-initiated global currency project whose debut remains uncertain.
In the meantime, Wei has taken Chinese-speaking Kazakhstani entrepreneur Tilektes Adambekov under his wing and helped the latter establish the licensed EBX crypto exchange in Kazakhstan, the worlds 10th-largest oil exporter. Adambekov joined the Chinese delegation for lunch in Davos to discuss the future of global markets over foie gras and fig chutney in a mountaintop restaurant with a panoramic view. Adambekov quoted Mao Zedong in a thank you speech to the delegation, which prompted resounding applause.
From the delegations perspective, Adambekov is a perfect fit for Chinas aspirations. He spent eight years working in China before returning home to focus on serving Russian-speaking crypto markets across borders. Plus, Kazakhstan has an open regulatory framework and is strategically situated along the path of Chinas Belt and Road initiative. Adambekov said his exchange aims to support tokenized oil and gas options, settled in national cryptocurrencies yet offering bitcoin liquidity.
From China to Oman, all businesspeople and diplomats agreed the dollar will remain king in commodities markets for the near future. But alternative options may already be on the horizon.
When asked if such options could usurp the greenback by 2025, Matthew Blake, the World Economic Forum's monetary systems lead, said the dollars role is so pronounced that to displace it in a meaningful way would take longer than four years.
Bitcoin may, or may not, participate in that shift.
Bitcoin has demonstrated some of the qualities that a distributed currency can possess, Blake said. Its also had challenges too. The role of a currency is to have a store-of-value with an inherent level of stability. There needs to be liquidity. In the case of bitcoin, it hasnt had those qualities thus far.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
Here is the original post:
Notes From the WEF: Oil-Producing Nations Want Dollar Alternatives, Just Not Bitcoin - Coindesk
- Bitcoin Ascends on Twitter While Major Altcoins Hit Multi-Year Lows - Cointelegraph - March 27th, 2020
- Bitcoin Is a Safe Haven for a Worse Storm Than This - CoinDesk - March 27th, 2020
- Japanese Investors Rushed To Buy The Dip After Bitcoin Bloodbath - Cointelegraph - March 27th, 2020
- Bitcoin community responds to FDIC warning on bank run - Decrypt - March 27th, 2020
- Binance Reveals Visa Debit Card in Push to Bring Bitcoin (BTC) and Crypto Payments Worldwide - The Daily Hodl - March 27th, 2020
- Just Like Bitcoin Before It, Cardano Is Banned From Wikipedia - Cointelegraph - March 27th, 2020
- How would a US recession affect Bitcoin? - Decrypt - March 27th, 2020
- Are Miners Waiting for Bitcoin to Hit Breakeven Point? - Cryptonews - March 27th, 2020
- Feds Unlimited QE Places Spotlight on Bitcoin Store-of-Value Narrative - Cointelegraph - March 27th, 2020
- Vitalik Proposes Solution to 'Embarrassing' Lack of BitcoinEthereum Bridge - Cointelegraph - March 27th, 2020
- Bitcoin Will "Come Of Age" During This Crisis: Top Investor Explains Why - Blockonomi - March 27th, 2020
- Algorithmic Crypto Art Changes Appearance to Reflect Bitcoin Volatility - Cointelegraph - March 27th, 2020
- Heres How To Predict Major Moves In The Price Of Bitcoin - Forbes - March 23rd, 2020
- Bitcoin Just Reversed and Its Vulnerable To A Drop Towards $5,200 - newsBTC - March 23rd, 2020
- Did BTC Miners Crash Bitcoin Price With 51 Days Before the Halving? - Cointelegraph - March 23rd, 2020
- Bitcoin Price Analysis: Bitcoin Steady Above $6,000, But Is It The Calm Before The Storm? - CryptoPotato - March 23rd, 2020
- Bitcoin Highly Correlated With HYG And IWM ETFs As Contagion Effect From Coronavirus Epidemic Spreads Across All Asset Classes - Forbes - March 23rd, 2020
- Top 3 Price Prediction Bitcoin, Ethereum, Ripple: A sea of red returns as weekend love disappears - FXStreet - March 23rd, 2020
- Tezos Foundation Offloaded Millions of Dollars Worth of Bitcoin in 2019: Report - CoinDesk - CoinDesk - March 23rd, 2020
- The Internet May Be Next Victim of Coronavirus Pandemic Netflix, Google, Apple and Amazon React - Bitcoin News - March 23rd, 2020
- Bitcoin Price (BTCUSD) is Off to a Bullish Start; Can It Sustain Gains Above $5,900.00? - InvestingCube - March 23rd, 2020
- Bitcoin Price Analysis: BTC Might Drop Beneath $4,800 Again If It Breaks THIS Short Term Trend Line - Coingape - March 21st, 2020
- Top 3 Coins Price Prediction: Bitcoin, Ethereum and Ripple consolidate their price following as bulls and bears wrestle for control - Confluence... - March 21st, 2020
- A factor that predicted the Bitcoin crash in 2018 suggests bullish action is ahead - CryptoSlate - March 21st, 2020
- Bitcoin's Difficulty on Track for Historic Drop, but There Is Silver Lining - U.Today - March 21st, 2020
- Bitcoin ranked on top 100 greatest designs of all time - Decrypt - March 21st, 2020
- The Puell Multiple Is Turning Bullish on Bitcoin - CoinDesk - Coindesk - March 20th, 2020
- Bitcoin Is Fast Approaching $7,000Heres Why - Forbes - March 20th, 2020
- Contrary To Popular Belief, Bitcoin Isn't Consistently Correlated To Anything - Forbes - March 20th, 2020
- Bitcoins Magic Is Fading, And Thats A Good Thing - Forbes - March 20th, 2020
- Bitcoin Rally Leaves Stocks In The Dust - Forbes - March 20th, 2020
- Coronavirus is forcing fans of Bitcoin to realize its not a safe haven after all - MIT Technology Review - March 20th, 2020
- Bitcoin Is Back In Free Fall And Dropping FastHeres Why - Forbes - March 20th, 2020
- Top Analyst Explains Why Bitcoin Price is Up 78% amid Coronavirus Outbreak - newsBTC - March 20th, 2020
- A Treatise on Bitcoin and Privacy Part 2: Dont Be Misled by Red Herrings - Nasdaq - March 20th, 2020
- Here's Why Grayscale Bitcoin Trust Is Rising Today - Motley Fool - March 20th, 2020
- Bitcoin (BTC) Bulls Say It's Time for 'Plan B' as Fed Ramps Up Repo Operations - U.Today - March 20th, 2020
- All You Need to Know About Bitcoin Wallets in... - Coinspeaker - March 20th, 2020
- Heres Why Bitcoins 15% Rally Could Fail Near The Key $6,500 Barrier - newsBTC - March 20th, 2020
- Bitcoin [BTC] Gains Expected as Unemployment Claims Soar in the US - Coingape - March 20th, 2020
- Heres What Caused Bitcoins Extreme Price Plunge - Forbes - March 19th, 2020
- Bitcoin Sees 9% Gain as Turmoil Hits the Forex Markets - CoinDesk - CoinDesk - March 19th, 2020
- Bitcoin loses half of its value in two-day plunge - CNBC - March 19th, 2020
- Here is the real reason behind Bitcoin price drop - Cryptopolitan - March 19th, 2020
- Bitcoin, Not Governments Will Save the World After Crisis, Tim Draper Says - Cointelegraph - March 19th, 2020
- Bitcoin Lost Roughly 50% Of Its Value In A Day - Forbes - March 19th, 2020
- Bitcoin Price Briefly Dips to 12-Month Low in Overnight Trading - CoinDesk - Coindesk - March 19th, 2020
- Despite Bitcoin Price Dips, Crypto Is a Safe Haven in the Middle East - CoinDesk - CoinDesk - March 19th, 2020
- What Bitcoin Price Would Be If Every American Invested $1K - Bitcoinist - March 19th, 2020
- Tether is Now Printing Millions, and Thats Huge for Bitcoin - newsBTC - March 19th, 2020
- Cyperpunk Myths and Bitcoin in Real Life with Udi Wetheimer - Coindesk - March 19th, 2020
- Bitcoin Lacks Momentum And A Break Below $5K Could Be Trend Defining - newsBTC - March 19th, 2020
- Experts Say the Fed's QE Program Will Strengthen Bitcoin One Way or Another - CoinDesk - Coindesk - March 19th, 2020
- Why Bitcoin's Safe-Haven Narrative Has Flown Out the Window - CoinDesk - Coindesk - March 19th, 2020
- Bitcoin Safe Haven Narrative in Question After Biggest Drop in 7 Years - Cointelegraph - March 19th, 2020
- 2 Months Ago, Andreas Antonopoulos Explained Why Bitcoin Would Crash - Cointelegraph - March 19th, 2020
- Bitcoin Price Analysis: Is This The Day Bitcoin Had Been Waiting For 11 Years? - CryptoPotato - March 19th, 2020
- Investors Can Hedge Long-Term Risk With New 2-Year Bitcoin Derivatives - CoinDesk - Coindesk - March 19th, 2020
- Lost Your Bitcoin? Here Is How You Can Recover It - Bitcoinist - March 19th, 2020
- Bitcoin & Gold Are Doing the Same Thing in Coronavirus Crisis: Pomp - Cointelegraph - March 19th, 2020
- Bitcoin is dead, long live Bitcoin - Decrypt - March 19th, 2020
- Ripple Executive Says Bitcoin, Ethereum and XRP Represent First Wave in Deconstruction of Finance - The Daily Hodl - March 19th, 2020
- Bitcoin and Altcoins Correct Gains - Cryptonews - March 19th, 2020
- Bitcoin Live: How to Watch the Next Price Run or Crash in Real-Time - Bitcoin News - March 19th, 2020
- Indian Government Reveals Inspection of Bitcoin Businesses, Informs Parliament of Results - Bitcoin News - March 19th, 2020
- Bitcoin Price Is Now Up Just 9% This Year - CoinDesk - Coindesk - March 11th, 2020
- Bitcoin Steadies as Bank of England Suddenly Cuts Rates to 11-Year Low - Cointelegraph - March 11th, 2020
- Is Bitcoin Really A Safe-Haven Asset? - Forbes - March 11th, 2020
- What the Oil Market Says About Bitcoin's 'Safe Haven' Status - CoinDesk - Coindesk - March 11th, 2020
- Bitcoin can still be a safe haven, experts say - Decrypt - March 11th, 2020
- Cryptocurrency in Focus: Outbreak Takes Toll on Bitcoin - TheStreet - March 11th, 2020
- Retail Demand May Force the SEC to Approve a Bitcoin ETF - Cointelegraph - March 11th, 2020
- The Simpsons Correctly Called President TrumpDid It Just Predict When Bitcoin Will Go Mainstream? - Forbes - March 11th, 2020
- Bitcoin Is Still Failing As A Flight To Safety Investment - Benzinga - March 11th, 2020
- Lightning-Fast New Bitcoin.com Wallet Proves Popular With Over 10 Million Wallets Created - Bitcoin News - March 11th, 2020
- Proving That Tether Manipulated Bitcoin 2017 Bull Run Wont Be Easy - Cointelegraph - March 11th, 2020
- Bitcoin Price Analysis: Elliott Wave Theory suggests price could fall further - FXStreet - March 11th, 2020
- Tezos Price Makes Gigantic Steps Eyeing $3.0 As Bitcoin Price Deals With Rejection At $8,000 - Coingape - March 11th, 2020
- Interlay Receives Web3 Foundation Grant for Bridging Bitcoin to Polkadot - Cointelegraph - March 7th, 2020
- Bitcoin's $9,000 Price Stays Steady as Sentiment Stays Positive - CoinDesk - CoinDesk - March 7th, 2020