Russia Mulls Own Stablecoin After Garantex Sanctions

Russia Explores Developing its Own Stablecoin

A senior Russian finance ministry official, Osman Kabaloev, has proposed the development of a domestically-backed stablecoin in response to recent US sanctions against the Garantex cryptocurrency exchange. The sanctions, which included the freezing of $27 million in Tether (USDT) held by Garantex, highlighted potential vulnerabilities for Russia within the existing global stablecoin ecosystem.

Kabaloev, deputy director of the ministry's financial policy department, argued that creating a Russian stablecoin could mitigate similar risks in the future. He stated that while Russia currently allows the use of stablecoins under an experimental legal regime, the Garantex situation demonstrated inherent risks. The proposed stablecoin could potentially be pegged to alternative currencies, reducing reliance on foreign stablecoins and their issuers.

Garantex Sanctions and the Trigger for Action

The US Department of Justice, in collaboration with German and Finnish authorities, acted to freeze Garantex assets in March 2025, citing over $96 billion in allegedly criminal proceeds processed since 2019. This action, along with Tether's freeze of the USDT, forced Garantex to cease operations, including withdrawals.

Garantex, initially sanctioned in April 2022 for alleged money laundering, reportedly resurfaced under a new name, raising concerns about its continued operation.

Other Crypto Developments in Russia

This move follows other recent crypto initiatives within Russia. Evgeny Masharov, a member of the Russian Civic Chamber, suggested creating a government crypto fund using assets seized from criminal activities. Further, legislation is progressing to recognize crypto assets within criminal procedure.

Growing Global Stablecoin Market

The global stablecoin market continues to expand, exceeding $200 billion in market capitalization in early 2025. Active stablecoin wallet growth surpassed 50% in a single year. In 2024, stablecoin transaction volumes reached $27.6 trillion, significantly surpassing the combined volumes of Visa and Mastercard.