- Russia proposes national stablecoin after $30M USDT freeze targets sanctioned exchange Garantex seeks non-dollar currency alternatives to bypass restrictions.
- Tether blocked 2.5B rubles ($30M) on Garantex exchange forced closure after EU sanctions prompts Moscow to explore state-backed crypto solutions.
Russian authorities are considering the creation of a government-backed stablecoin, potentially linked to non-U.S. currencies, following the freezing of digital wallets tied to sanctioned entities.
This comes after Tether, issuer of the USDT stablecoin, blocked over 2.5 billion rubles ($30 million) on Garantex, a Moscow-based cryptocurrency exchange blacklisted by the European Union in April. The exchange halted operations shortly after the freeze.
Osman Kabaloev, a senior official in Russia’s Finance Ministry, stated that the incident highlights risks in relying on foreign stablecoins. “Recent restrictions push us to develop alternatives, possibly pegged to other currencies” he said. While details remain unclear, the proposal signals a shift in strategy as Russia faces growing financial isolation.
Stablecoins like USDT, which mirror traditional currencies, have become tools for cross-border transactions in nations under sanctions. Russian businesses previously used USDT to bypass banking restrictions, but the freeze exposes vulnerabilities in this approach. The country has permitted limited crypto use for international trade since 2022, though domestic crypto payments remain prohibited.
Russia’s central bank maintains opposition to cryptocurrencies for everyday transactions, citing volatility and oversight challenges. However, Governor Elvira Nabiullina acknowledged that companies are testing crypto payments under a government-approved pilot. ETHNews analysts suggest a national stablecoin could reduce reliance on dollar-linked assets but would require cooperation from non-Western trade partners to gain traction.
The plan faces technical and geopolitical hurdles, including currency selection and regulatory frameworks. Meanwhile, the Garantex freeze underscores how global stablecoin issuers can enforce compliance with sanctions, complicating Russia’s efforts to leverage crypto for economic resilience.
