El Salvador has suggested utilizing digital assets like Bitcoin to facilitate trade with Russia, aiming to circumvent the extensive economic sanctions imposed on Moscow.
This proposal was revealed by Alexander Ilyukhin, Russia’s first secretary at the Nicaraguan embassy and head of its El Salvador office, during an interview with the Russian state media outlet Izvestia.
Bitcoin Transactions
The use of cryptocurrency is being considered to mitigate the impact of sanctions and logistical challenges on conventional trade channels. While Russian exports to El Salvador have remained relatively stable, imports have seen a significant decline.
Implementing a crypto-based trade mechanism could offer a practical solution to these financial barriers. Ilyukhin stated, “Calculating transactions is challenging because El Salvador’s official currency is the U.S. dollar. As an alternative, El Salvador suggests using cryptocurrency for trade operations.”
El Salvador, which became the first nation to adopt Bitcoin as legal tender in 2021, has positioned itself as a pro-crypto country. This is evident from its daily Bitcoin purchases and several regulations supporting the sector.
However, Ilyukhin mentioned that Russia might face difficulties due to its ban on using crypto as legal tender, enacted in early 2021. “Bitcoin is not widespread in our country, so we are looking for other ways to strengthen trade,” he noted.
Despite this, experts believe the proposal could help overcome trade barriers caused by Western sanctions, which have disrupted Russia’s trade with major partners, including China, due to increased caution among local banks.
Russia’s Recent Pro-Crypto Moves
Recently, the Russian State Duma passed a bill legalizing Bitcoin mining and permitting the use of crypto for international trade. Russian lawmaker Anton Gorelkin, Deputy Chairman of the State Duma’s Committee on Information Policy, emphasized the bill’s significance in a Telegram post.
