A new report (Disruptive Technology: Bitcoins, Currency Reinvented?) recently issued by Kuwait-based investment banking and asset management firm Kuwait Financial Centre, also known as Markaz, even goes a step further: Oil producing countries, particularly in the GCC, could benefit if they would use bitcoin in oil trading, Markaz’ research department argues.
This comes a bit as a surprise, since bitcoin as an unregulated and — as of now — highly volatile cryptocurrency, has no manifestation other than bits and bytes stored somewhere in the virtual space and seems not to be the most reliable means of trade for the world’s most sought-after commodity. The idea is not new, though: There has been an Internet debate about one year ago on what would happen if the OPEC would adopt bitcoin as transaction currency. The outcome: Firstly, the US would certainly not sit and watch the dollar losing its petrocurrency status and would do whatever needs to be done to defend the greenback; secondly, China wouldn’t allow it as it wants the yuan to be a petrocurrency as well; thirdly, in the moment oil and gas gets priced in bitcoins, it would be exposed to the cryptocurrency’s extreme volatility with massive consequences and fiscal uncertainties for petroleum-exporting countries. Speculators had a wide and anonymous field to play.
So what did Markaz actually mean? They basically said that using bitcoins would save payment transaction costs for oil exporting countries, because sending and receiving bitcoins of any denomination is just a matter of seconds and costs next to nothing. For the clearance of oil payments through conventional banks, exporting countries currently have to wait one to three days and pay the usual banking fees.