There is a level of understanding among many investors and fintech enthusiasts that cryptocurrency and blockchain-based protocols are very likely to expand their remit as the underlying technology for many global transactions and contractual partnerships.
Already, smart contracts based on the Ethereum blockchain are being used in earnest for many purposes including cross-border settlement, dividends, automatic payments, liability management, and stock splits within the securities trading business, lending, and financial data recording and as a result, Ethereum and many of the exchange-specific native tokens that use its protocol are gaining value as a technological resource in the future of financial services infrastructure.
Bitcoin remains an increasingly popular store of value, and has made its foray into the traditional commercial world with Tesla becoming the first corporate Bitcoin 'whale', and a publicly listed one at that. Its shareholders have not baulked at its huge level of investment in Bitcoin at all. Perhaps other listed giants will follow.
Now, another factor has come into the fray, which has strengthened the cause for cryptocurrency and blockchain protocols as mainstays of the financial markets economy, that being the possibility that Russia's government may permit the acceptance of Bitcoin as payment for energy exports.
If this goes ahead, Russia's gas and oil companies, some of which are among the largest in the world, would become de facto Bitcoin trading entities alongside their existing global commodities trading endeavours.
As a result, Bitcoin prices rose to over $45,000 this weekend, and even hedge fund managers within the traditional wealth management sector have begun to look closely at their performance.
According to Forbes, Larry Fink, CEO of BlackRock, has stated that the firm is beginning to study digital assets as demand from its customers is increasing. BlackRock manages over $10 trillion in client assets, and is the largest wealth manager in the world. It has had a volatile time itself recently, its own shares having declined by 13% over the period of a month, therefore it is interesting that it may explore cryptocurrency.
If BlackRock is losing interest from its own shareholders despite being the largest wealth manager in the world at a time when markets are volatile and is looking at cryptocurrency due to demand from its own clients, that is a telling circumstance.
Pavel Zavalny, Member of the State Duma in Russia, stated at the end of last week that the national fiat currency of the buyer, as well as Bitcoin, were being considered as alternative ways to pay for Russia’s energy exports as a result of the nation's central government having expressed its intention to allow 'friendly' countries such as India and China to settle in their own fiat currencies but expect 'unfriendly' countries to settle in Roubles.
As the currency denominations for settlement of oil and gas products are being examined by the Russian government, Mr Zavalny said recently “We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan. With Turkey, it will be lira and rubles.”
Now, as cryptocurrency comes into the fray, analysts over the weekend have said that Bitcoin and a few of the popular altcoins are braced for a '$10 trillion earthquake' as Ethereum, BNB, Solana and Cardano have all increased massively in value, and XRP has also appreciated due to its functionality as a payment protocol which may benefit in the settlement of energy products as well as the bullish view that Ripple, its owner, may also settle its lawsuit with the US Securities and Exchange Commission in its favour very soon.
It is an exciting time for these cryptocurrencies, as they are already embedded in other areas of the financial markets structure, therefore if they become tied to top-tier transactions of energy products between national governments and global energy providers, it would be a big boon for sure.