Clare: Saudi Arabia’s petro-dollar exit: A global finance paradigm shift
The financial world is bracing for a significant upheaval following Saudi Arabia’s decision not to renew its 50-year petro-dollar deal with the United States, which expired on Sunday, 9 June, 2024.
The lapsed security agreement – signed by the United States and Saudi Arabia on 8 June 1974 – establishes two joint commissions, one on economic co-operation and the other on Saudi Arabia’s military needs, and was said to have heralded an era of increasingly close co-operation between the two countries.
American officials at the time expressed optimism that the deal would motivate Saudi Arabia to ramp up its oil production. They also envisioned it as a blueprint for fostering economic collaboration between Washington and other Arab countries.
The crucial decision to not renew the contract enables Saudi Arabia to sell oil and other goods in multiple currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively in US dollars. Additionally, the potential use of digital currencies like Bitcoin may also be considered.
This latest development signifies a major shift away from the petrodollar system established in 1972, when the US decoupled its currency from gold, and is anticipated to hasten the global shift away from the US dollar.
Cross-border CBDC transactions
In a more recent move, Saudi Arabia has announced its involvement in Project mBridge, a project which explores a multi-central bank digital currency (CBDC) platform shared among participating central banks and commercial banks. It is built on distributed ledger technology (DLT) to enable instant cross-border payments settlements, and foreign-exchange transactions.
The project has more than 26 observing members including the South African Reserve Bank, which was greenlighted as a member this month.
The better known observing members of mBridge are those of the Bank of Israel, Bank of Namibia, Bank of France, Central Bank of Bahrain, Central Bank of Egypt, Central Bank of Jordan, European Central Bank, the International Monetary Fund, the Federal Reserve Bank of New York, the Reserve Bank of Australia, and the World Bank.
In tandem, the project steering committee has created a bespoke governance and legal framework, including a rulebook, tailored to match the platform’s unique decentralised nature.
Evolution of Project mBridge
Project mBridge is the result of extensive collaboration starting in 2021 between the BIS Innovation Hub, the Bank of Thailand, the Central Bank of the United Arab Emirates, the Digital Currency Institute of the People’s Bank of China and the Hong Kong Monetary Authority.
In 2022, a pilot with real-value transactions was conducted. Since then, the mBridge project team has been exploring whether the prototype platform could evolve to become a Minimum Viable Product (MVP) – a stage now reached.
As it enters the MVP stage, Project mBridge is now inviting private-sector firms to propose new solutions and use cases that could help develop the platform and showcase all its potential. LINK
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Clare: The Minister of Communications announces a campaign to turn off towers in preparation for switching to fiber optics
On Tuesday, Minister of Communications Hiyam Al-Yasiri announced the imminent launch of a campaign to extinguish towers in residential areas in preparation for the transition to the fiber optic system.
Al-Yasiri said in a statement, reported by the official news agency, and seen by Al-Iqtisad News, that “the Ministry intends to implement a campaign to extinguish the towers in coordination with the relevant security authorities, and according to the schedules set for them, after which it will switch to the fiber-optic system.”
She added, “There will be no losses to tower owners or unplanned extinguishing, as the companies operating on FTTH lines have completed their work in dozens of Iraqi regions in preparation for extinguishing those towers, and there is a detailed scheduled plan that will be announced in advance to extinguish the Wi-Fi towers.” Fi) and converting it to FTTH service, which will be with the consent of the citizen and not compulsory.”
Al-Yasiri continued, “The prices that FTTH will offer will be lower or equal to the prices of Wi-Fi, despite its high cost, but we bear these costs with the companies in order to provide good service to citizens.” LINK
BuckEyeTree: Iraq continues to transform into the modern era with banking and now fiber optics. With security and stability and safety (banking laws against terrorism and corruption), investors / companies will find a good environment to do business.
If I remember correctly from UB2B, “in the coming days” phrase could potentially mean “anyrime.” Praying with the blessings to be realized that this will be in the coming “days” or sooner. Big plans for an improved Iraq and for ministries.
