Russia Explores Sovereign Stablecoin Amidst Sanctions Pressure

In a significant move, a high-ranking official within Russia’s Finance Ministry has proposed the development of a domestically-controlled stablecoin. This proposal follows the recent freezing of wallets linked to the sanctioned Russian exchange Garantex by US authorities and the stablecoin issuer Tether.

Osman Kabaloev, Deputy Director of the Ministry’s financial policy department, highlighted the potential vulnerabilities exposed by the Garantex sanctions. He emphasized the need for Russia to explore creating its own stablecoin, similar to Tether’s USDT, to mitigate future risks associated with foreign-issued digital currencies. Kabaloev’s statement, reported by Reuters and TASS, underscores a growing interest in financial sovereignty within Russia.

Kabaloev stated to TASS, “We do not impose restrictions on the use of stablecoins within the experimental legal regime. Recent developments have shown that this instrument can pose risks for us. This leads us to consider the need to develop internal instruments akin to USDT, potentially pegged to other currencies.”

The impetus for this proposal stems from the March 6th action by the US Department of Justice, in collaboration with German and Finnish authorities, to freeze domains associated with Garantex. Garantex, allegedly processing over $96 billion in criminal proceeds since 2019, saw Tether freeze $27 million in USDT, effectively halting its operations.

The development of a Russian stablecoin reflects a broader trend within the country’s evolving relationship with cryptocurrency. Proposals for a government-backed crypto fund, comprised of assets seized from criminal activities, have also surfaced. While the details of this potential stablecoin remain unclear, this announcement marks a significant step towards Russia’s exploration of alternative financial systems.

The global stablecoin market continues its growth, surpassing $200 billion in early 2025, with active stablecoin wallets increasing by over 50% in a year (Artemis and Dune report). In 2024, stablecoin volumes reached a staggering $27.6 trillion, exceeding the combined volumes of Visa and Mastercard.