Key Points:

  • El Salvador crypto proposal suggested that BRICS trade with digital assets to reduce reliance on the US dollar.

  • Russia legalizes crypto for international trade to avoid Western sanctions.

  • El Salvador stays neutral in the Russia-Ukraine conflict and seeks BRICS membership for investment opportunities.

El Salvador has floated the use of cryptocurrency to trade with the BRICS Alliance for reducing dependence on the US dollar.

Read more: El Salvador’s Bank for Private Investment Proposed to Support Bitcoin

El Salvador Crypto Proposal Hints at Trade with BRICS for No US Dollar Dependence

The El Salvador crypto proposal comes a few months after the June change in Russian legislation that allowed cryptocurrencies for international settlements and came into force in September, says Russian diplomat Alexander Ilyukhin, who added the ruling would make it easier to transact for El Salvador, whose official currency is the US dollar.

The Russian legislative step, specifically taken to bypass Western sanctions, has drawn interest worldwide. El Salvador crypto proposal was regarded against the strategic backdrops of responses to the pressures for trading in US dollars, marred by the intermediation of correspondent banks in the US and Europe.

El Salvador Neutral Over Russia-Ukraine Conflict

Through the phase of incessant conflict between Russia and Ukraine, El Salvador has maintained neutrality. Although Ukrainian President Volodymyr Zelensky courted support from El Salvador, the Central American nation chose to continue its non-aligned policy.

Zelensky underlined the fact that although El Salvador is interested in tighter relations with Russia, it also probed membership in the BRICS bloc as a way to attract investments and independence from the US and the World Bank.

In 2018, the volume of bilateral trade between El Salvador and Russia was $4 million, while in 2020, it had risen to $20 million. There is huge potential for cryptocurrency to boost this increase, as this would correspond to El Salvador's acceptance of Bitcoin and other digital assets.

In this regard, El Salvador considers the opening of a financial institution to process transactions in a number of various cryptocurrencies. However, the course may be thwarted by Western banks intervening in such transactions.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.