Key Takeaways
- El Salvador explores using Bitcoin for trade with Russia to strengthen its economic ties and mitigate trade challenges.
- The country aims to maintain its independent foreign policy despite external pressures, focusing on enhancing bilateral relations with Russia.
- Consideration of joining the BRICS bloc highlights El Salvador's strategy to diversify partnerships and reduce reliance on the US dollar.
El Salvador's Proposal for Trade using Bitcoin
El Salvador has proposed using Bitcoin to address trade challenges with Russia as part of its strategy to enhance economic ties. This initiative follows El Salvador's historic decision to adopt Bitcoin as legal tender, aiming to expand its trade capabilities. The Salvadoran government is also exploring the creation of a financial institution that can handle transactions in various currencies globally. The current use of the US dollar poses difficulties in trading with Russia, especially amid increasing Western pressures.
Says Alexander Ilyukhin, head of the Russian embassy office in El Salvador,
“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.”
Strengthening Economic Relations Amid Geopolitical Tensions
El Salvador has maintained a neutral position amidst the Russia-Ukraine conflict, refusing to take sides despite Ukrainian attempts to gain support. Although trade between El Salvador and Russia has been modest, there is significant potential for growth in their economic cooperation. Recent years have seen trade turnover fluctuate, nearing $100 million prior to the disruptions caused by the pandemic and geopolitical tensions. Ilyukhin noted that while Russian exports to El Salvador were stable, imports had drastically decreased, yet opportunities for business remained. The Salvadoran leadership is considering establishing direct flights to Russia as part of enhancing bilateral relations.
Potential BRICS Membership and a Shift in Global Strategy
El Salvador's independent foreign policy positions it for deeper economic ties with Russia and exploration of BRICS membership. The BRICS bloc's focus on de-dollarization aligns with El Salvador's interest in growing its economic partnerships beyond the US. Becoming a part of BRICS could offer El Salvador various economic opportunities and strengthen its global stance. The government believes that diversifying its economic alliances may alleviate reliance on the US dollar and enhance its international position.
[Original Article]
