Russia Finance Ministry Official Proposes Domestic Stablecoins After Tether Freeze

TLDR

• Russian Finance Ministry official suggests creating domestic stablecoins after Tether froze Russia-linked wallets
• Over $27 million worth of USDT was frozen on Russian exchange Garantex in March
• Garantex had to suspend operations after the freeze, affecting billions in rubles
• US authorities claim Garantex processed over $96 billion in criminal proceeds since 2019
• Russia has been using crypto for international payments to work around Western sanctions

Russia is exploring the development of its own stablecoins after a major freeze of crypto wallets on a Russian exchange, according to statements from a senior Finance Ministry official.

Osman Kabaloev, deputy head of the ministry’s financial policy department, indicated that Russia should consider creating internal tools similar to USDT (Tether), possibly pegged to other currencies. This comes after Tether blocked digital wallets on the Russian crypto exchange Garantex last month.

“The recent blockage makes us think that we need to consider creating internal tools similar to USDT, possibly pegged to other currencies,” Kabaloev said on Wednesday.

On March 6, Tether froze more than 2.5 billion rubles (about $30.12 million) held in wallets on Garantex. The freeze forced the exchange to suspend its operations.

This action came days after Garantex was placed under European Union sanctions. The US Department of Justice also collaborated with authorities in Germany and Finland to freeze domains associated with the exchange.

Russia’s Crypto Strategy

Russian regulators have allowed the experimental use of cryptocurrencies for international payments as the country faces increasing difficulties with traditional payment methods due to Western sanctions. Before the recent blockage, USDT was a popular payment tool among Russian firms.

“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,” Kabaloev told TASS, a state-owned Russian news agency.

US authorities claim that Garantex has processed over $96 billion worth of criminal proceeds since launching in 2019. The US Treasury’s Office of Foreign Assets Control first sanctioned the exchange in April 2022 over alleged money laundering violations.

According to a Swiss blockchain analytics firm, Garantex has allegedly resurfaced under a new name. The firm claims the exchange has been laundering millions in ruble-backed stablecoins and transferring them to a newly established exchange.

Broader Crypto Developments

The head of Russia’s central bank, Elvira Nabiullina, who opposes using cryptocurrencies for domestic payments, stated that Russian firms are actively testing international cryptocurrency payments as part of the government’s experimental approach.

Other Russian officials are working on new legislation to recognize crypto as property for criminal procedure purposes. In March, Evgeny Masharov, a member of the Russian Civic Chamber, proposed creating a government crypto fund that would include assets confiscated from criminal proceedings.

The global stablecoin market has seen major growth recently, surpassing $200 billion in total capitalization in early 2025. A joint report from blockchain analysis platforms shows that active stablecoin wallets increased by over 50% in one year.

Stablecoins also experienced massive adoption in 2024, driven by increased bot usage. Total stablecoin transaction volumes reached $27.6 trillion, exceeding the combined volumes of Visa and Mastercard by 7.7%.

Russia’s interest in developing domestic stablecoins highlights the growing importance of digital currencies in countries facing international financial restrictions and demonstrates how cryptocurrency technology is becoming an important tool for nations seeking financial autonomy.