El Salvador has reportedly proposed using digital assets such as Bitcoin to trade with Russia to circumvent the extensive economic sanctions imposed on Moscow.
Alexander Ilyukhin, Russia’s first secretary at the Nicaraguan embassy and head of the office in El Salvador, revealed this in an interview with Russian state media. Izvestia.
Bitcoin transactions
The proposed use of crypto aims to address the impact of sanctions and logistical challenges on conventional trading channels. Although Russian exports to El Salvador have remained relatively stable, imports have declined significantly.
Implementing a cryptocurrency-based trading mechanism could provide a practical solution to these financial barriers. According to Ilyuchin:
“Calculating transactions is challenging because the official currency of El Salvador is the US dollar. As an alternative, El Salvador proposes to use cryptocurrency for trade transactions.”
El Salvador became the first country to adopt Bitcoin as legal tender in 2021 and has firmly positioned itself as a pro-crypto country. This is evident from daily Bitcoin purchases and various regulations supporting the sector.
However, Ilyukhin said Russia might find it difficult as the use of cryptocurrencies as legal tender was banned in early 2021. He noted:
“Bitcoin is not widespread in our country, so we are looking for other ways to strengthen trade.”
Nevertheless, experts believe the proposal could address trade barriers caused by Western sanctions. Reflecting increased caution among local banks, these sanctions have disrupted Russian trade with key partners, including China.
Russia’s recent pro-crypto moves
Recently, the Russian State Duma passed a bill legalizing Bitcoin mining and allowing the use of crypto for international trade.
Russian MP Anton Gorelkin, deputy chairman of the Duma Information Policy Committee, emphasized the significance of the bill in a Telegram post. He highlighted recent updates, proverb:
“We managed to cancel the provision prohibiting the organization of the circulation of cryptocurrency, which in the current version caused quite serious concerns among industry representatives. The ban on advertising digital currencies remains, but will be included in the corresponding amendments to the federal law ‘On Advertising’.”