Key Points
- El Salvador has proposed using Bitcoin for trade with Russia due to financial sanctions.
- Russia’s ban on crypto as legal tender complicates the proposal.
El Salvador has suggested the use of cryptocurrencies, specifically Bitcoin, for trade with Russia. This comes as a way to circumvent financial restrictions resulting from sanctions.
El Salvador’s Crypto Proposal
The proposal was made due to Russia’s limited financial options for maintaining ties with El Salvador, a result of imposed sanctions. The idea was highlighted by Alexander Ilyukhin, the first secretary of the Russian embassy in Nicaragua and head of the office in El Salvador, during an interview with the Russian state-owned newspaper “Izvestia”.
El Salvador, the first country to formally adopt Bitcoin as legal tender, made the suggestion as an alternative to the U.S. dollar, which is recognized as the country’s national currency.
Russian Response and Crypto Legislation
Despite the proposal, Ilyukhin noted that the acceptance of crypto for cross-border trade at this stage is uncertain. This is due to Russia’s ban on crypto as a legal tender, which was implemented in early 2021.
The suggestion of using crypto for trade came amidst wider efforts to facilitate financial transactions between the two nations. Ilyukhin emphasized the importance of Russians being able to freely make payments in different countries for tourism development, implying that cryptocurrencies might be the only feasible option currently.
While Russia has prohibited cryptocurrency payments, legislative changes may be forthcoming. The Russian parliament recently progressed two crypto-related bills in their initial readings. These could potentially allow the use of digital assets for international trade with major partners like China, India, the UAE, and Turkey.
