El Salvador proposes crypto trade with Russia amid sanctions pushback News ▸ El Salvador · Russia ▸ Bitcoin ▸ Macro
El Salvador proposes crypto trade with Russia amid sanctions pushback
The proposed use of Bitcoin and crypto aims to address the impact of sanctions and logistical challenges on conventional trade channels.
2 min read
Updated: Jul. 29, 2024 at 8:39 pm UTC
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El Salvador has reportedly suggested using digital assets like Bitcoin for 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 its El Salvador office, revealed this in an interview with Russian state media outlet Izvestia.
Bitcoin transactions
The proposed use of crypto aims to address the impact of sanctions and logistical challenges on conventional trade channels. While Russian exports to El Salvador have remained relatively stable, imports have significantly declined.
The implementation of a crypto-based trade mechanism could offer a practical solution to these financial barriers. According to Ilyukhin:
“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 became the first nation to adopt Bitcoin as legal tender in 2021 and has firmly 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 find it difficult because crypto use was banned as a legal tender in early 2021. He noted:
“Bitcoin is not widespread in our country, so we are looking for other ways to strengthen trade.”
Despite this, experts believe the proposal could address trade barriers caused by Western sanctions. Due to increased caution among local banks, these sanctions have disrupted Russia’s trade with major partners, including China.
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. He highlighted recent updates, saying:
“We managed to cancel the provision banning the organization of cryptocurrency circulation, which in its 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.'”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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