Russia explores stablecoin alternative to USDT amid new Garantex sanctions

Russia may be pushing for its own stablecoin after Tether froze wallets linked to a sanctioned local exchange, following enforcement actions by US authorities. Speaking to local media, Deputy Finance Minister Osman Kabaloev urged the government to consider developing a ruble-pegged stablecoin as an alternative to Tether’s USDT. His comments came just weeks after Tether froze around $27–28 million worth of USDT last month on wallets belonging to Garantex, a Russian crypto exchange under international sanctions. Kabaloev believes these restrictions have exposed a major weak spot in Russia’s digital finance infrastructure, which is the country’s reliance on foreign-issued stablecoins. Tensions initially escalated in early March when the U.S. Department of Justice, along with German and Finnish authorities, took down domains linked to Garantex. Just days later, the U.S. Treasury’s Office of Foreign Assets Control imposed fresh sanctions, accusing the exchange of laundering funds and processing transactions for sanctioned entities like the Houthi movement. Garantex has accused Tether of “entering the war against the Russian crypto market,” warning users that all USDT transactions in Russian wallets could now be at risk. Although stablecoin use remains unrestricted within Russia’s experimental legal regime, Kabaloev believes recent events made it clear the country needs homegrown alternatives. “The recent blockage makes us think that we need to consider creating internal tools similar to USDT, possibly pegged to other currencies,” he was quoted as saying. Crypto use in global trade Russian lawmakers have been pushing for ways to integrate crypto into global commerce as a means to bypass Western sanctions. Last year, the Russian parliament passed two crypto-related bills in their first reading, including one that would allow digital assets to be used in international trade. Since then, some Russian firms have turned to digital assets to keep trade flowing. According to earlier reports, Russian oil companies have been using Bitcoin, Ethereum, and stablecoins like USDT to facilitate payments with buyers in China and India. While these crypto-powered trades still represent a small slice of the overall volume, they reportedly run into tens of millions of dollars per month, sources claimed at the time. Another report from investment firm VanEck claimed that Russia, along with China, had started using Bitcoin to settle select energy transactions. With crypto already playing a growing role in trade, Russian officials have also begun warming up to the idea of a national crypto reserve, similar to recent moves in the US. In March, Civic Chamber member Evgeny Masharov proposed creating a state-managed reserve fund using digital assets confiscated through criminal proceedings, which he believes could help bolster Russia’s financial stability and reduce dependence on foreign-held reserves. CBDC launch delayed Amid this backdrop, Russia has delayed the rollout of its central bank digital currency, which has long been in the works. Originally planned for mass adoption by mid-2024 , the digital ruble is now expected to launch no earlier than 2026. According to local media reports, the delay stems from technical hurdles, with many banks struggling to migrate away from foreign software systems, especially U.S.-based solutions like Oracle. These database systems are critical for processing high volumes of transactions securely, and switching to domestic alternatives under current sanctions has proven challenging for Russian banks, which have made it difficult to fully support the digital ruble’s rollout. The post Russia explores stablecoin alternative to USDT amid new Garantex sanctions appeared first on Invezz

Source: Invezz