As reported by CryptoSlate, El Salvador has reportedly made a proposal to utilize digital assets such as Bitcoin for trade with Russia in response to the extensive economic sanctions imposed on Moscow. Alexander Ilyukhin, Russia’s first secretary at the Nicaraguan embassy and head of its El Salvador office, disclosed this information in an interview with Russian state media outlet Izvestia.
The suggested use of cryptocurrency aims to tackle the impact of sanctions and logistical challenges on traditional 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 potentially provide 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 made history by becoming the first nation to adopt Bitcoin as legal tender in 2021 and has solidified its position as a pro-crypto country through daily Bitcoin purchases and supportive regulations.
However, Ilyukhin noted that Russia might encounter difficulties as the use of crypto as legal tender was banned in early 2021.
He mentioned, "Bitcoin is not widespread in our country, so we are looking for other ways to strengthen trade."
Despite this, experts are of the opinion that the proposal could potentially help address trade barriers resulting from Western sanctions. These sanctions have disrupted Russia’s trade with major partners, including China, due to increased caution among local banks.
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 significance of the bill in a Telegram post, clarifying, "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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