Will billion-dollar country Saudi Arabia settle international trade using Bitcoin? Finance minister shuns USD

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With bitcoin already legal tender in two countries – El Salvador and the Central African Republic – Saudi Arabia feels compelled to think openly about international currencies. Bitcoin has deep liquidity and the potential to gain value over time, a feature that fiat currencies around the world lack.

The Kingdom of Saudi Arabia may consider using Bitcoin among other currencies other than the traditional US dollar to settle international trade, according to the finance minister. The world’s largest oil exporter plans to strengthen its relations with other countries, including China, and the USD may not come into play. In addition, countries such as Russia have indicated their openness to accepting Bitcoin to settle international trade, especially oil exports and imports.

The Kingdom of Saudi Arabia has maintained a currency peg to the dollar for decades and is now ready to diversify into other currencies to open up its global relationship. For example, China pledged to buy more oil from the Middle East during President Xi Jinping’s visit to Riyadh last year. More importantly, the two countries have agreed to use the yuan – which has a digital version – to settle international trade.

There is no problem discussing how we settle our trade agreements, whether in US dollars, euros, Saudi riyals,

Mohammed Al-Jadaan, Saudi finance minister, said in an interview in Davos.

I don’t think we’re giving up or ruling out any discussion that will help improve trade around the world,

With bitcoin already legal tender in two countries – El Salvador and the Central African Republic – Saudi Arabia feels compelled to think openly about international currencies. Additionally, Bitcoin has significant liquidity and the potential to gain value over time, a feature that fiat currencies around the world lack.

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Bitcoin and the macroeconomic outlook

The Bitcoin market has attracted not only retail and novice investors, but also institutional investors. Billion-dollar companies are looking for ways to gain crypto exposure both directly and indirectly. After making over 797,530,644 successful transactions since its inception and attracting around 53,026,948 holders, countries want to add Bitcoin to their balance sheet in place of gold.

The Saudi government has shown interest in blockchain technology with several crypto exchanges already licensed to operate in the country. Additionally, Bitcoin supports the oil industry through mining. Notably, oil companies use excess energy to mine Bitcoin, which is profitable for them and their investors.

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Meanwhile, Saudi Arabia’s central bank is working on a digital Riyal to digitize its economy. As such, the chances of Saudi Arabia accepting international exchanges of Bitcoin and other reputable digital assets are likely.

The bitcoin and altcoin industry has a total market capitalization of around $1 trillion, which is of interest to most countries due to the potential for exponential growth in the future.

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