OilCoin appears capable of widespread utility and adoption for use in cross-border commercial transactions in oil and oil-related assets. Prior to the creation of Oil Coin crypto, no currency has been denominated in barrels of oil. As a consequence, parties to a forward or future purchase and sale of oil assets outside of the same country (or currency zone) must record their transaction in a national fiat currency with one or both parties forced to bear or hedge the risk of cross-currency volatility as well as fluctuations in the price of oil.
A cross-border, future market-price, forward purchase transaction settled in OilCoin cryptocurrency is one example where this risk may be avoided.
Since the price of one Oil Coin price of one barrel of oil, pricing a future purchase contract in OilCoin enables the purchaser of oil to purchase OilCoin on the date on which the contract take effect. Also pay those Oil Coin crypto at a future date in exchange for a fixed quantity of oil.
In the absence of OilCoin, the purchaser would force it to hedge or bear the risk of changes in both crosses. Yes, currency rates and the price of oil. Similarly, to the extent that changes in oil price quoted in a national fiat currency are expecting to track changes in that national fiat currency relative to other fiat currencies, pricing transactions in OilCoin will be an effective means to avoid currency risk in ordinary commercial transactions even for goods and services unrelated to oil.
Oilcoin in consumer transactions
At present, ordinary consumer transactions in digital currencies have had a significant appeal but limited adoption. This is due to a variety of factors, the most significant of which is the absence of a practical and ubiquitous solution which enables a consumer to pay for goods and services in digital currency and allow a vendor to receive immediate and guaranteed payment for a fixed amount of local fiat currency.
OilCoin has developed a partial but workable and highly effective solution to this problem through the use of branded debit cards supported by OilCoin’s valuable oil reserve assets. Under the OilCoin debit card program, a holder of OilCoin may reserve a portion of their OilCoin to support their crypto card issuance and use. From the vantage point of an OilCoin debit cardholder, their holdings of OilCoin will reduce as they make purchases. From the vantage point of the vendor, they receive immediate payment in full in local currency without making any modification to their ordinary business practices.