Russian authorities are reassessing the country’s dependence on foreign-issued stablecoins in light of recent sanctions that led to the freezing of crypto assets linked to the Garantex exchange. Osman Kabaloev, deputy director of the Finance Ministry’s financial policy department, highlighted the risks exposed by the incident, arguing it strengthens the case for developing a Russian alternative. He suggested that a domestically issued stablecoin, potentially pegged to a currency other than the U.S. dollar, could protect Russia from similar vulnerabilities in the future.
The controversy began on March 6, when Tether, one of the largest stablecoin issuers, froze $27 million in USDT tied to Garantex. This action followed a coordinated effort involving the U.S. Department of Justice, as well as authorities in Germany and Finland. U.S. officials accused Garantex of facilitating illicit transactions worth over $96 billion since its inception in 2019. Already under U.S. sanctions for money laundering since 2022, the exchange was forced to suspend its operations, including withdrawals.
Following the freeze, a Swiss-based blockchain analytics firm reported that Garantex had resurfaced under a new name, transferring funds laundered through ruble-backed stablecoins to a different platform. This development has cast a spotlight on the role stablecoins play in cross-border transactions within Russia, particularly under the growing weight of Western sanctions.
Prior to the freeze, stablecoins such as USDT were widely used by Russian businesses to conduct international trade, as access to the global financial system remained severely restricted. Although the Central Bank of Russia has consistently opposed the use of cryptocurrencies domestically, its governor, Elvira Nabiullina, confirmed that experimental trials for crypto-based payments in international transactions are underway. These trials offer Russian companies a way to bypass the increasing sanctions that have intensified since 2022.
In response to the challenges posed by these sanctions, Russian authorities are considering regulatory reforms. One proposal under discussion involves amending the country’s criminal procedure code to formally recognize digital assets as property. Additionally, Evgeny Masharov, a member of the Russian Civic Chamber, has suggested the creation of a state-run crypto fund, which would be composed of digital assets seized in criminal investigations.
These moves come as global interest in stablecoins surges. A recent report by Artemis and Dune revealed that active stablecoin wallets have increased by over 50% in the past year alone. With the stablecoin market cap surpassing $200 billion in 2025 and annual transaction volumes reaching $27.6 trillion in 2024, stablecoins now exceed the combined transaction volume of Visa and Mastercard.
For Russian officials, this shift represents both a challenge and an opportunity. The freezing of assets linked to Garantex has added urgency to efforts to establish domestic financial tools that can function independently of foreign institutions, marking a significant pivot in the country’s digital finance strategy.
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