Russian officials are reconsidering the country’s reliance on foreign-issued stablecoins after wallets linked to the sanctioned crypto exchange Garantex were frozen.
Russian officials are reconsidering the country’s reliance on foreign-issued stablecoins after wallets linked to the sanctioned crypto exchange Garantex were frozen. Osman Kabaloev, deputy director of the Finance Ministry’s financial policy department, said the incident demonstrated the risks of using foreign stablecoins and reinforced 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 help Russia avoid similar vulnerabilities in the future.
Tether, a major stablecoin issuer, froze $27 million in USDT linked to Garantex on March 6. The action was part of a coordinated effort involving the U.S. Department of Justice, as well as authorities in Germany and Finland. U.S. officials said Garantex had facilitated more than $96 billion in illicit transactions since its founding in 2019. The exchange, which had already been under U.S. sanctions since 2022 for money laundering, was forced to suspend operations, including withdrawals.
A blockchain analytics firm based in Switzerland reported that Garantex has re-emerged under a new name, transferring funds laundered in ruble-backed stablecoins to a different platform. The event has drawn attention to how stablecoins are being used for cross-border transactions in Russia, especially under Western sanctions.
Before the freeze, stablecoins like USDT were widely used by Russian companies for international trade due to limited access to global financial systems. While the Central Bank of Russia remains opposed to crypto use within the domestic economy, its governor, Elvira Nabiullina, confirmed that crypto-based payments are being tested for international transactions under an experimental legal framework. These trials allow companies to bypass restrictions that have become more prominent since 2022.
The government is now considering regulatory reforms, including amendments to the criminal procedure code that would formally recognize digital assets as property. In addition, Evgeny Masharov of the Russian Civic Chamber proposed creating a state-run crypto fund composed of digital assets seized in criminal investigations.
This shift in strategy comes amid a broader global rise in stablecoin usage. A recent report by Artemis and Dune found that active stablecoin wallets have increased by over 50% in the past year. The stablecoin market cap has exceeded $200 billion in 2025, and annual transaction volume hit $27.6 trillion in 2024, surpassing that of Visa and Mastercard combined.
Russian officials see these developments as both a challenge and an opportunity. The freezing of Garantex-linked assets has added urgency to discussions around building domestic tools for digital finance that can operate outside the control of foreign institutions.
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