While recent global headlines have been dominated by chaos in Chinese and US equity markets, currency markets have also been volatile. The Azerbajiani manat, the national currency of Azerbaijan, has lost nearly 32 percent of its value practically overnight due to the falling price of oil.

On December 18, the value of Manat recorded an all-time low against the U.S. dollar since January 13, 2006, plummeting from 0.96 down to 0.65.

According to the Observatory of Economic Complexity, petroleum oils and gas exports in Azerbajan generated more than $26 billion in income, accounting for more than 90 percent of the economy’s entire revenue.

Due to its heavy reliance on the oil industry, the abrupt price drop of crude oil and gas severely devalued the national currency of Azerbaijan, pressuring the central bank to implement currency flow restrictions and gain control of the foreign exchange market.

“Azerbaijan is an oil country, and countries like Azerbaijan cannot discount the factor of drop in the price of oil — the main source of their budget,” Ali Hasanov, said in an interview with the Azerbaijani Press Agency. “Everyone knows that oil prices in world markets won’t rise in the near future.”

The unexpected devaluation of the manat has affected cross-industry businesses operating in the country and corporations dealing with international suppliers and partners outside of Azerbaijan.

Financial experts including Simon Mandell, senior vice president of Central and Eastern European, Middle East and African equities at New York-based frontier markets brokerage firm Auerbach Grayson, believe that the economy of Azerbaijan will continue to crumble amid the oil price slump and will affect the operations of existing businesses.

Essentially, in the short term, businesses will attempt to avoid the use of the manat until it recovers from its recent price slump. This could lead to disputes between its suppliers, international partners and its customers.

Unfortunately, the manat, like many other reserve currencies in the world including the Nigerian naira are dependent on the performance of certain assets or industries such as oil, and will continue to become more volatile and unpredictable in the upcoming years.

In these situations, it is beneficial for both companies and countries to use independent currencies with high and stable international value and exchange rates such as the U.S. dollar. However, many have suggested that bitcoin may be able to fill this role for trade and commerce both internationally and domestically.

Historically, the price of bitcoin has not been closely correlated with the performance of other currencies or assets. Instead, its price is wholly dependent on the demand of its users and potential buyers as the supply of Bitcoin mined is fixed and predictable. Thus, if bitcoin is able to fill the role of as a store of value and as an independent currency, it could help developing countries such as Azerbaijan avoid financial issues regarding its currency.

As Nick Szabo proposed during the strict capital controls implementation in Greece, every aspect of an economy must embrace bitcoin for it to operate as an independent currency and a store of value.

It will be highly unlikely for economies such as Azerbaijan’s to embrace bitcoin, especially due to its poor financial infrastructure. However, depending on a currency which relies on a single asset to determine its value is risky and detrimental to businesses with international operations.