Local media recently reported that El Salvador has proposed using cryptocurrency, possibly Bitcoin, for settlements to solve its trade challenges with Russia.
This proposal is part of El Salvador’s broader efforts to strengthen economic ties with Russia and enhance its geopolitical stance.
El Salvador Eyes Bitcoin for Trade with Russia
Alexander Ilyukhin, the first secretary of the Russian embassy in Nicaragua and head of the office in El Salvador, revealed this move. He acknowledged El Salvador’s groundbreaking decision to adopt Bitcoin as its legal tender.
“Within the country, any tourist can pay for any services with Bitcoin. But in our country, Bitcoin is not widespread, so we are looking for other ways to strengthen trade. The government of El Salvador is ready to continue economic cooperation with Russia,” Ilyukhin said.
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El Salvador’s official currency, the US dollar, presents significant hurdles in trade with Russia, especially as Western countries exert pressure on the Latin American nation. While the Salvadoran government is exploring the creation of a financial institution capable of processing transactions in various world currencies, the involvement of intermediary banks in the US and Europe poses a risk of Western intervention.
Amid these pressures, El Salvador has upheld its independent foreign policy by declining to align with any party involved in the Russia-Ukraine conflict. Although Ukrainian President Volodymyr Zelensky’s team has attempted to secure El Salvador’s support, Ilyukhin noted they have yet to be successful.
BRICS Membership: A New Chapter for El Salvador’s Global Strategy?
El Salvador’s neutral stance on the conflict and its resistance to Western pressures have paved the way for deeper economic cooperation with Russia. Despite the relatively modest trade volume between the two countries, there is significant potential for growth. Trade turnover has fluctuated in recent years, reaching nearly $100 million before the COVID-19 pandemic and geopolitical tensions impacted international relations.
“Russian exports to El Salvador remained almost at the same level, but imports reached almost zero. But there are prospects. There are many entrepreneurs from El Salvador who are interested in doing business with Russia,” Ilyukhin added.
Beyond economic aspects, the country’s leadership is also exploring resuming direct flights with Russia. They are also considering establishing a Russian embassy in El Salvador to further cement bilateral ties.
Amid these diplomatic maneuvers, El Salvador is also considering joining the BRICS economic bloc, which includes Brazil, Russia, India, China, and South Africa. This potential membership could provide El Salvador with new economic opportunities and a stronger geopolitical standing.
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The BRICS bloc has been actively pursuing de-dollarization, with some countries, including Russia, turning to cryptocurrencies as an alternative to the US dollar. By diversifying its economic partnerships and reducing its reliance on the US, El Salvador could support its goal of improving its global standing.
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