Iran’s Hormuz Fees in Crypto? PetroDollar Architect Says ‘Could Be Ripple’

Jim Rickards, a seasoned expert in intelligence, finance, and geopolitical strategy, recently made some thought-provoking comments in a discussion about cryptocurrency and sovereign energy settlement. Rickards, who played a role in the creation of the PetroDollar system in the 1970s, mentioned Ripple as a potential currency that Iran could be using to collect tolls from oil tankers passing through the Strait of Hormuz, alongside Bitcoin and Tether.

The context of Rickards’ remarks was based on a report from the Financial Times, which revealed that Iran had started charging vessels a toll in cryptocurrency for transiting the strategic waterway. While the specific cryptocurrency was not disclosed in the initial report, Rickards speculated on the possibilities in real-time.

One key point Rickards emphasized was that regardless of the cryptocurrency Iran chooses to use, the toll is still denominated in dollars. This means that even though the payment is settled in crypto, it does not represent a break from the dollar system. Rickards explained, “You can hit on the dollar but you can’t get away from it. Cryptocurrencies have a dollar equivalent. So you’re always back to the dollar no matter how hard people try to get away from it.”

Furthermore, Rickards raised a pertinent question about Tether, the largest stablecoin by market cap, which has ties to the US Secretary of Commerce. If Iran is indeed settling oil tolls in Tether, it could be seen as routing payments through an instrument with direct connections to the US government that it is seeking to avoid.

The mention of Ripple in this conversation is significant. Ripple’s XRP and XRP Ledger are designed for rapid and cost-effective cross-border settlements between institutional entities. With transaction settlement times of three to five seconds and a network of over 300 financial institutions using its payment infrastructure, Ripple offers a compelling solution for international payment processing.

While it remains unclear whether Iran is actually using Ripple for energy settlement, Rickards’ inclusion of Ripple in his analysis is noteworthy. As a former CIA contractor and a key figure in the PetroDollar system, Rickards’ acknowledgment of Ripple as a potential alternative to dollar-denominated oil settlement highlights the platform’s relevance in the evolving landscape of global finance.

In conclusion, Rickards’ comments shed light on the complex interplay between cryptocurrencies, geopolitics, and traditional financial systems. While the use of cryptocurrencies for sovereign energy settlement may offer new possibilities, the underlying dynamics of the dollar system continue to exert influence. Ripple’s emergence as a potential player in this arena underscores the platform’s growing importance in facilitating efficient and secure cross-border transactions.