El Salvador, a country known for being pro-crypto, has proposed using digital assets like Bitcoin for trade with Russia to overcome economic sanctions. The move comes as a response to the challenges faced by conventional trade channels due to sanctions and logistical issues.
Alexander Ilyukhin, Russia’s first secretary at the Nicaraguan embassy and head of its El Salvador office, revealed in an interview with Russian state media outlet Izvestia that El Salvador is considering using cryptocurrency for trade operations with Russia. This is seen as a practical solution to the financial barriers that have affected imports from Russia to El Salvador.
El Salvador’s official currency is the U.S. dollar, making it difficult to calculate transactions with Russia. By using cryptocurrency, El Salvador hopes to streamline trade operations and strengthen its trade relationship with Russia. However, Russia banned the use of cryptocurrency as legal tender in early 2021, which may pose a challenge to implementing this proposal.
Despite this obstacle, experts believe that using crypto for trade could help both countries bypass the trade barriers imposed by Western sanctions. These sanctions have disrupted Russia’s trade with major partners, including China, due to increased caution among local banks.
In a recent development, the Russian State Duma passed a bill legalizing Bitcoin mining and allowing the use of cryptocurrency for international trade. Russian lawmaker Anton Gorelkin highlighted the significance of the bill, emphasizing that it addresses concerns raised by industry representatives. Although the ban on advertising digital currencies remains in place, it will be included in future amendments to the Federal Law ‘On Advertising.’
Overall, the proposal to use cryptocurrency for trade between El Salvador and Russia shows the potential for digital assets to facilitate international trade, especially in the face of economic sanctions. While there are challenges to overcome, both countries are exploring innovative solutions to strengthen their trade relationship and navigate the complexities of the global economy.
