El Salvador Eyes Crypto Trade with BRICS to Bypass US Dollar

El Salvador's latest crypto proposal suggests using digital assets to trade with the BRICS Alliance. This aims to reduce reliance on the US dollar. This move follows Russia's June legislation change. The change legalized cryptocurrency for international settlements effective from September. Russian diplomat Alexander Ilyukhin notes this will simplify transactions for El Salvador. El Salvador's official currency is the US dollar.

Why is El Salvador pursuing this? Russia's legislative step was a strategic response to bypass Western sanctions. That has attracted global interest. El Salvador's proposal comes amidst pressures to trade in US dollars. This is often complicated by the intermediation of correspondent banks in the US and Europe.

Throughout the ongoing Russia-Ukraine conflict, El Salvador has maintained a neutral stance. Despite Ukrainian President Volodymyr Zelensky seeking support, El Salvador continues its non-aligned policy. Interestingly, while exploring closer ties with Russia El Salvador is also probing BRICS membership. This aims to attract investments and gain independence from the US and the World Bank.

Bilateral trade between El Salvador and Russia was $4 million in 2018. It rose to $20 million by 2020. With cryptocurrency, there is significant potential to boost this growth. This aligns with El Salvador's acceptance of Bitcoin and other digital assets. Could this be a game-changer for their economy?  

El Salvador is considering opening a financial institution to handle transactions in various cryptocurrencies. However, this path may face challenges. Western banks could intervene in such transactions. Will El Salvador's crypto ambitions overcome these obstacles?  

El Salvador's push for crypto trade with BRICS aims to reduce US dollar dependence. It leverages Russia's legal changes. This neutral stance in the Russia-Ukraine conflict and exploration of BRICS membership could open new economic avenues. This is despite potential challenges from Western financial institutions