El Salvador has proposed using Bitcoin for trade with Russia to overcome financial transaction limitations imposed by sanctions.
This revelation came from Alexander Ilyukhin, First Secretary of the Russian Embassy in Nicaragua and Head of the Office in El Salvador, in an exclusive interview with State media outlet Izvestia.
Ilyukhin highlighted the challenges in financial transactions between Russia and El Salvador, primarily due to El Salvador’s use of the U.S. dollar as an official currency. However, He pointed out that despite the offer to use cryptocurrency for trade, Russia is unlikely to accept it at this time due to its ban on crypto as legal tender.
El Salvador became the first country to adopt Bitcoin as a legal tender in September 2021 and has encouraged its citizens and other territories to follow in its footsteps. Some stakeholders in the financial industry have lauded the move and predicted that the country’s gross domestic product (GDP) could increase tenfold over the next five years if it continues its Bitcoin and artificial intelligence adoption plan.
The South American country has been accumulating cryptocurrency as part of its monetary strategy. Currently, it holds about 5,825.76 BTC, valued at over $400 million. In May 2024, the government unveiled a proof-of-reserves platform—a website that allows for real-time monitoring of the nation’s Bitcoin holdings through on-chain data.
Meanwhile, the discussion of using cryptocurrency for trade comes as the Bank of Russia explores new avenues for facilitating financial transactions amid ongoing economic sanctions on the country. The Bank is reportedly considering the legalization of stablecoins for cross-border transactions.
Alexei Guznov, deputy governor of the Russian Central Bank, revealed in an interview with Izvestia recently that efforts are underway to regulate stablecoins. The proposed framework would allow individuals to transfer stablecoins into Russia, accumulate them domestically, and use them for international payments. These regulations aim to establish stablecoin usage as a structured and permanent feature rather than a temporary measure.
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