El Salvador has proposed the use of Bitcoin for trade with Russia as a solution to financial constraints imposed by sanctions, according to a Russian embassy official. In an interview with the Russian state-owned newspaper “Izvestia,” Alexander Ilyukhin, highlighted the challenges of trade with El Salvador, given their recognition of the U.S. dollar as a national currency. This has led El Salvador to suggest cryptocurrencies as an alternative for trade with Russia.
El Salvador made history by becoming the first country to officially adopt Bitcoin as legal tender in September 2021. President Nayib Bukele announced this decision at the Bitcoin 2021 conference in Miami. Despite this offer, Ilyukhin pointed out that Russia currently bans cryptocurrencies as a legal tender, making it unlikely for them to embrace crypto for cross-border trade at the moment.
While Bitcoin is not widely used in Russia, the government of El Salvador is open to continuing economic cooperation with them. The discussion of using cryptocurrencies for trade between the two nations comes as part of broader efforts to facilitate financial transactions. Ilyukhin emphasized the importance of Russians being able to make payments freely in different countries, noting that for tourism development, cryptocurrencies may be the most viable option.
Despite Russia’s current ban on cryptocurrency payments, there are potential legislative changes on the horizon. The Russian parliament has advanced two crypto-related bills in their first readings, which could potentially allow the use of digital assets for international trade with major partners such as China, India, the UAE, and Turkey. This signals a shift in Russia’s stance on cryptocurrencies and opens up possibilities for future trade relations using digital assets.
In conclusion, El Salvador’s proposal to use Bitcoin for trade with Russia reflects a creative solution to navigate financial constraints imposed by sanctions. While there are challenges due to Russia’s current ban on cryptocurrencies, legislative changes on the horizon could pave the way for the use of digital assets in international trade. As both countries explore alternative options for financial transactions, the potential use of cryptocurrencies could open up new opportunities for economic cooperation and trade relations between El Salvador and Russia.
