El Salvador, the first country to adopt Bitcoin as legal tender, is considering joining the BRICS. In this context, relations with Russia are strengthening, despite obstacles related to the war in Ukraine and Western sanctions. Bitcoin could play a key role in these new economic alliances.
Bitcoin country El Salvador could be invited to the BRICS table
In 2021, El Salvador became the first country to adopt Bitcoin as legal tender alongside the dollar, 20 years after abandoning the Salvadoran colón.
Since then, relations between El Salvador and the International Monetary Fund (IMF) have not improved, with the adoption of Bitcoin attracting much criticism.
In the latest survey, the IMF concluded its latest survey by highlighting progress in governance, transparency and strengthening public finances, while reiterating its call to see additional efforts to mitigate the risks related to fiscal and financial stability from the Bitcoin law in El Salvador.
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Recently, Izvestia media outlet was able to interview Alexander Ilukhin, First Secretary of the Russian Embassy in Nicaragua and Head of the Embassy's Office in El Salvador, regarding trade and diplomatic relations between Russia and El Salvador.
During this interview, Ilukhin revealed that El Salvador offered Russia to conduct Bitcoin transactions because of restrictions on the use of the dollar by Russian actors.
In fact, so far the Salvadoran government does not see any interest in abandoning the use of the dollar, but it could exploit Bitcoin's censorship-resistant properties to expand its business with US-sanctioned entities or preferring to use a more sovereign network.
Alexander Ilukhin says:
“Within the country, any tourist can pay in Bitcoins for any service. However, in our country, Bitcoin is not widely used, which is why we are looking for other ways to strengthen trade. […] It would be ideal to create a bank in El Salvador that could carry out transactions in various international currencies — the yuan, the Indian rupee, the Russian ruble.
He goes on to say that Russia should not force El Salvador to use a currency they do not want:
“But we must understand that at present El Salvador does not renounce its dollar and that all the intermediary banks through which El Salvador carries out its transactions are American and European banks. It is possible that if we try to carry out transactions in other currencies, our Western opponents could intervene to prevent this from happening.”
Moreover, Ilyukhin revealed that El Salvador is reportedly considering joining BRICS and is about to submit an application for membership in the organization.
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What is the status of economic and diplomatic relations between El Salvador and Russia?
Relations between El Salvador and Russia are generally positive, but encounter certain obstacles, mainly due to opposition from countries such as the United States and Ukraine.
El Salvador is among the countries that have chosen to remain neutral in the conflict between Russia and Ukraine.which began in 2022. According to Alexander Ilyukhin, a Russian national, the Ukrainian camp, supported by the United States, tried to pressure El Salvador to obtain its support in this conflict.
At the beginning of the conflict, Nayib Bukele, the president of El Salvador, had advised smaller countries to follow his example and not take sides in this armed conflict..
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El Salvador's neutrality allows it to benefit from the advantages of both camps and to maintain its relations with Russia, which have lasted since 1992. Since 2018, Trade between the two countries increased sharply, from $6 million to over $100 million before the invasion of Ukraine began..
So, Using Bitcoin for trade would allow the two countries to strengthen their alliance bypassing sanctions imposed by the West.
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Source: Izvestia
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I have no choice but to share my knowledge and transmit the passion I have for the blockchain universe. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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