Key facts:
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Since de-dollarization is not an easy task, bitcoin could be an alternative.
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Pakistan is strongly opposed to cryptocurrencies for complying with FATF requirements.
The US dollar continues to lose ground in global foreign trade. A new country began to pay for oil imports with yuan, China’s national currency, leaving behind the traditional use of the greenback for these trades.
Pakistani Oil Minister Musadik Malik confirmed to the news agency Reuters that buying a shipment of oil with the renminbi, also known as the Chinese yuan. Government advertisement the arrival of the first shipment of crude oil from Russia at a price discount. It was about 45 thousand tons of oil that arrived at the port of Karachi last Monday and that they started downloading on Tuesday.
Chinese currency is accepted by Russia as payment because that country maintains agreements with the Asian giant with a view to displacing the US dollar of international trade.
As reported by CriptoNoticias, the two world powers closed an agreement that focuses on the prevalence of the Chinese yuan for the commercialization of various items. This economic cooperation was raised until the year 2030.
With this move, Pakistan joins the list of countries that have decided to stand up to the dollar and start trading through other national currencies.
Blocks of countries, such as the BRICS and ASEAN, have publicly expressed their interest in decrease dependence on the US dollar for these business transactions.
In fact, the ASEAN group of Eurasian nations also claimed to want to expel MasterCard and Visa services, since they are susceptible to US sanctions.
In Latin America, Brazil, Argentina, Bolivia and Venezuela; they have also participated in the movement against the dollaran undeclared war that began more than 3 months ago, as reported by CriptoNoticias.
What role does Bitcoin play in de-dollarization?
Building on Russia and China’s intention to lessen the use of the US dollar for international trade, bitcoin (BTC), the market pioneer cryptocurrency, could play a role, though perhaps not immediately.
According to the opponents of the dollar, the greenback it is used for the application of economic sanctions that end up affecting their economies. In that sense, leaving that currency aside would mean a kind of monetary emancipation.
However, although those who oppose the dollar raise the need to use other currencies for international trade, the realization of a global de-dollarization putting local currencies at the forefront does not look easy in the short term.
This is suggested by James Brander, a Canadian economist who assures that the dollar will continue to be important in the world economy, even in the long term. But he does not dismiss that, in the future, becomes displaced by other currencies.
Taking the above into account, among the options to be considered by countries that want to deal with the dollar are, in addition to national currencies, central bank digital currencies (CBDC). and even cryptocurrencies like bitcoin.
This is the case of Russia, which in the midst of the sanctions applied to it for the invasion of Ukraine announced this year its readiness to turn to cryptocurrencies for cross-border paymentsas reported by CriptoNoticias.
Since the beginning of this month of June, Rosbank, the largest bank in Russia, has been running a pilot test for the execution of international payments with cryptocurrencies. The institution is also part of the 12 banks participating in the creation of the digital ruble, the CBDC of Russia.
However, the possibility of using bitcoin for international trade it is not the same for the government of pakistan, due to his stance against cryptocurrencies. In May, the government of that country ratified the prohibition of offering services related to these assets. Everything, on account of complying with the requirements of the International Financial Action Task Force (GAFI).
Even so, the possibility that the South Asian country cannot be ruled out entirely also do future proofing with cryptocurrencies, following the strategy of the Russians, who prohibit payments with bitcoin within the country while testing cross-border payments with these assets. For now, pakistan alone bet on a CBDC.
Meanwhile, and despite the prohibitions, citizens of both countries turn to bitcoin and other cryptocurrencies as an alternative to the pressures of their local economies.
