Russia Should Create Its Own Stablecoins, Says Finance Ministry Official

Highlights:

• Osman Kabaloev suggests Russia should create its stablecoins, tied to alternative currencies.
• EU sanctions Garantex after its links to banned Russian banks and illicit activities.
• Ruble-backed token could reduce reliance on dollar-pegged stablecoins for Russian trade.

Deputy director at the Ministry of Finance’s financial policy department of Russia, Osman Kabaloev, said Russia should unveil its own stablecoins, according to April 16 reports by Reuters and the state-owned news agency TASS. Kabaloev made the remarks following the recent freeze of Russia-linked digital wallets containing USDT. The incident has led the Finance Ministry official to explore alternative stablecoins that operate similarly to USDT but are tied to currencies other than the US dollar.

According to Reuters, Osman Kabaloev, Deputy Head of Russia’s Finance Ministry Financial Policy Department, said the country should consider developing its own stablecoins, potentially pegged to non-dollar currencies, following last month’s freeze of Russia-linked digital…

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EU Sanctions Garantex, Russia Explores Alternatives to USDT

In February, the European Union imposed sanctions on Garantex, a major Russian crypto exchange, due to its connections with sanctioned Russian banks such as Sberbank, T-Bank, and Alfa-Bank. The EU accused the platform of aiding these institutions in bypassing sanctions.

Shortly afterward, Tether took action by freezing wallets connected to Garantex, which held more than 2.5 billion rubles, equal to around $30 million. This action led the exchange to halt its operations temporarily, including crypto withdrawals. Before the sanctions, Russian businesses commonly relied on USDT for transactions.

Soon after, US and European authorities seized Garantex’s infrastructure. The US Justice Department charged its operators for aiding money laundering and cybercrime. Officials say the platform handled over $96 billion in illegal transactions. Russia now allows limited crypto use in global trade, but sanctions make it harder.

Speaking to TASS, Kabaloev noted that stablecoins are not currently limited under Russia’s experimental framework, though recent events have highlighted possible risks. He added that these concerns are pushing authorities to explore local alternatives to USDT, possibly backed by other currencies. “The recent blockage makes us think that we need to consider creating internal tools similar to USDT, possibly pegged to other currencies,” he said.

Stablecoins are usually backed by fiat currencies like the US dollar and are often used in crypto trading and cross-border transactions. Their stability and minimal volatility make them attractive, particularly in areas dealing with financial restrictions or sanctions. According to a recent report by Bitwise, stablecoin transactions approached $14 trillion last year, exceeding Visa’s annual transaction volume for the first time. Prior to recent crackdowns, many Russian firms used USDT for cross-border payments amid rising global financial hurdles.

Russia Explores Stablecoin to Increase Financial Autonomy

​Bank of Russia Governor Elvira Nabiullina has reiterated the central bank’s opposition to domestic crypto use. However, she acknowledged that Russian firms are actively testing international crypto payment solutions within the regulatory sandbox. This approach aligns with broader efforts to enhance Russia’s financial autonomy and reduce reliance on Western financial infrastructure. 

A ruble-backed token could lessen reliance on USDT and USDC, both dollar-pegged. This shift would aid Russia’s goal of moving away from dollar-centric trade.