Bitcoin mania could ramp up global efforts to dethrone the dollar, analyst says

Bitcoin mania could prove to be the flashpoint for some of the world's largest oil producing countries to make a major move against the dollar, according to one commodity analyst.
The world's most popular cryptocurrency has skyrocketed in recent months, soaring above $19,000 on Thursday on the Coinbase exchange, before notching a huge decrease. Such wild price swings have prompted some of the world's biggest banks to denounce bitcoin as a fraud, warning investors of a speculative bubble doomed to fail.
However, at the start of the month, U.S. regulators gave the green light for two of the world's largest futures exchanges to list bitcoin futures. Futures are derivatives, or financial instruments, that obligate a trader to either buy or sell an asset at a specified time and at a specified price. The announcement was viewed by some observers as a vote of confidence for the digital currency's legitimacy.
"This should bolster the increasing popularity of cryptocurrencies; so much so that they may pose a threat to the role of the U.S. dollar as the world's reserve currency," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note on Friday.
Oil contracts based on the dollar currently dominate global markets, though countries such as China, Russia and Venezuela have long-viewed a move away from the greenback as a strategic priority. That's because this would allow them to reduce their dependency on the dollar while, at the same time, limiting their exposure to U.S. currency risks and American sanctions.
"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," Brennock said.
On Sunday, Venezuelan President Nicolas Maduro announced the launch of an oil-backed cryptocurrency called the "petro." The OPEC member has sought to shun dollar payments for its oil amid worsening relations between Caracas and Washington.
Maduro's pivot away from the dollar was derided by opposition lawmakers, who questioned whether the "petro" would ever see the light of day. Nonetheless, should the new cryptocurrency find a captive audience, "it may eventually prevail as a means of conducting financial transactions — including oil sales," Brennock said.
Russia is also a major backer of cryptocurrencies. While the country may, along with Venezuela, share a long-running goal of overturning the dollar-energy pricing norm, Brennock said China could prove to be the "sticking point" for the future of cryptocurrencies in the commodity sphere.
China's central bank stopped operations for digital currency trading platforms in Beijing and Shanghai in mid-September amid concerns the unregulated markets could pose a major financial risk.

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