Russia Proposes Ruble-Backed Stablecoin to Counter Dollar Dominance

In response to Tether’s restrictions on wallets associated with the sanctioned Russian exchange Garantex, Russia’s Finance Ministry is exploring the creation of domestic stablecoins pegged to foreign currencies.

Tether froze assets linked to Garantex after the European Union imposed sanctions on the platform, effectively halting its operations and preventing user redemptions.

Osman Kabaloev, deputy head of the Ministry's financial policy department, suggested that Russian authorities are now considering stablecoin alternatives similar to USDT, aiming to develop an internal digital asset solution.

This development follows the blocking of digital wallets on Garantex, which cut off access to over 2.5 billion roubles ($30.12 million).

The initiative reflects growing concerns about the dominance of US-backed stablecoins in global liquidity, as the US edges closer to introducing new regulatory frameworks for the sector.

Regulatory Push for Local Financial Alternatives

Amidst increasing financial restrictions, Russia is exploring the potential of a ruble-backed stablecoin as a strategic move to reduce its dependence on US-dollar-pegged tokens like USDT and USDC.

Prior to recent sanctions, Russian companies heavily relied on USDT for international transactions, as access to the global financial system became more challenging.

Given the growing pressure on the US dollar from tariffs and deteriorating trade relations with China, Russia sees an opportunity to enter the stablecoin competition.

Such a move would align with Russia’s broader efforts to reduce reliance on dollar-based trade.

Russian regulators have traditionally enforced strict rules around crypto within the domestic economy, particularly for retail payments.

However, a more flexible regulatory framework has allowed firms to explore crypto-based settlement systems for international trade, particularly as a means of bypassing Western sanctions.

The Finance Ministry's current focus on stablecoins signals a shift toward developing sovereign or semi-sovereign solutions for cross-border value transfers.

While specifics on design or timelines have not been disclosed, officials have indicated an openness to stablecoins pegged to both the US dollar and other foreign currencies.

Bank of Russia Governor Elvira Nabiullina has reiterated the central bank’s resistance to domestic crypto circulation but acknowledged that Russian firms are testing international crypto payment systems as part of a regulatory sandbox.

This shift in approach is part of a broader effort to enhance Russia’s financial independence and minimise reliance on Western financial infrastructure.

In this context, a ruble-backed stablecoin tied to alternative currencies could provide a controlled and internally governed solution for accessing global liquidity.

While no formal stablecoin issuance has been committed, the proposal reflects increasing attention from Russian institutions to the risks of foreign-controlled crypto assets in a fragmented global payments landscape.