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Saudi Arabia Ditches Dollar in Favor of Crypto

Fri 29 Sep 2023 ▪ 4 min of reading ▪ by Evans S.
Trading

Saudi Arabia, a long-standing oil powerhouse, is making history by wholeheartedly embracing crypto. This transition, far from insignificant, marks a significant evolution in the global financial landscape.

Crypto in Saudi Arabia: abandoning the petrodollar

The Rapid Rise of Crypto in Saudi Arabia

As nations like India and Saudi Arabia express their intent to distance themselves from the dollar, interest in crypto in the region is experiencing a meteoric ascent.

Saudi Arabia, far from being a mere bystander, has emerged as a major player in the digital realm. With an impressive 12.0% growth in crypto transactions in a year, the country demonstrates a clear commitment to economic diversification.

Crypto explosion in Saudi Arabia Source: Chainalysis
Crypto explosion in Saudi Arabia Source: Chainalysis

Abdulmajed Alhamzah, a prominent figure in the sector, highlights the enthusiasm of both individual and institutional investors for this new asset class.

Crypto, once perceived as a threat to traditional financial systems, is now gaining acceptance among major players. They anticipate an imminent monetary revolution.

From Cold to Hot: The Changing Relationship of the Saudi Government with Crypto

Despite its growth, crypto has not always been well-received in Saudi Arabia. In 2018, the government declared the use of bitcoin illegal, warning against potential risks associated with other cryptocurrencies.

However, the dynamics changed in 2022. The hiring of Mohsen Al Zahrani as the “Crypto Chief” for the Saudi Central Bank marks a decisive turning point.

The growing interest in Web3 and blockchain projects, including the partnership with The Sandbox to explore the metaverse, reflects a futuristic vision.

As reported by Chainalysis, Abdulmajed remains optimistic about the future of crypto in the region, emphasizing regulatory efforts to protect investors.

Abandoning the Petrodollar: A Geopolitical Revolution

The history of the petrodollar is deeply rooted in geopolitical agreements, notably the Quincy Pact and negotiations in 1974. These agreements tied Saudi Arabia to the U.S. dollar, ensuring the exclusive sale of oil in this currency. However, with the gradual decline of the dollar’s dominance, especially with the emergence of BRICS, Saudi Arabia appears ready to break free from this yoke.

The recent decision to no longer exclusively accept the dollar for oil is a clear indication of this transition. If the dollar loses its global status, as suggested by President Putin, it could lead to inflation in the United States, impacting the global economy.

Saudi Arabia’s bold move toward crypto reflects a global transformation of financial systems. If other nations follow Saudi Arabia’s lead, it could challenge the dominance of the dollar, paving the way for a more balanced global economy.

Is the world on the cusp of a new monetary era? Only time will tell, but one thing is certain: crypto is much more than a passing trend. It could be the key to a global financial revolution, much like what is happening between Russia and Africa.

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Evans S. avatar
Evans S.

Fasciné par le bitcoin depuis 2017, Evariste n'a cessé de se documenter sur le sujet. Si son premier intérêt s'est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l'état du secteur dans son ensemble.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.