El Salvador has proposed using digital currencies for trade with Russia and is considering BRICS membership to enhance economic ties.
Points
- El Salvador proposes using crypto for trade with Russia to circumvent US dollar sanctions.
- Considering BRICS membership to diversify economic relations.
- Russia supports El Salvador’s bid, viewing it as a strengthening of Global South alliances.
- Potential challenges include the limited use of Bitcoin in Russia and reliance on intermediary banks.
- The proposal includes setting up a bank to support transactions in multiple currencies.
El Salvador has made a bold proposal to use digital currencies as a medium of trade with Russia, aiming to bypass the limitations imposed by the US dollar, which is under sanctions in Russia. This initiative underscores El Salvador’s ongoing efforts to leverage cryptocurrencies to enhance its economic flexibility and reduce dependency on Western financial systems.
Ilyukhin, a diplomat from Russia, highlighted that the use of the US dollar as El Salvador’s official currency complicates direct trade transactions. To overcome this hurdle, El Salvador has suggested the use of cryptocurrencies, which could provide a more pragmatic approach for facilitating payments between the two nations.
Despite this innovative proposal, implementing cryptocurrency-based trade presents challenges. Bitcoin, while widely used in Latin America, does not enjoy the same level of adoption in Russia. This disparity could hinder the seamless execution of the proposed trade framework. Furthermore, the reliance on intermediary U.S. and European banks for transactions introduces additional risks of Western intervention.
In a bid to strengthen its economic stance, El Salvador is also considering applying for BRICS membership. The BRICS group, which includes Brazil, Russia, India, China, and South Africa, recently expanded to incorporate the UAE, Iran, Egypt, and Ethiopia. Joining BRICS could provide El Salvador with access to new financing avenues and a political platform less influenced by Western powers.
Russia has expressed strong support for El Salvador’s bid to join BRICS. During a meeting with Russian Foreign Minister Sergey Lavrov, El Salvador’s Prime Minister Anwar Ibrahim confirmed the submission of a formal application letter. This move aligns with El Salvador’s strategy to diversify its economic ties and foster international collaboration.
Economically, Russia is one of El Salvador’s significant trading partners in Europe, with bilateral trade valued at $3.1 billion in 2023. Enhancing this relationship through BRICS could boost cooperation in various sectors, including investment, trade, science and technology, agriculture, defense, education, and tourism.
解説
- El Salvador’s proposal to use cryptocurrencies for trade with Russia reflects its innovative approach to bypassing economic sanctions.
- The bid for BRICS membership indicates a strategic move to diversify economic ties and reduce reliance on Western economies.
- Challenges include the varying levels of cryptocurrency adoption and the risks associated with intermediary banks.
- Successful integration into BRICS could provide El Salvador with new economic opportunities and strengthen its global political influence.