A high-ranking official from Russia's Finance Ministry has proposed the development of stablecoins pegged to foreign currencies following the freezing of wallets holding USDT used by Russian users. This suggestion is being made as stablecoins supported by the US dollar dominate the global market and as the US government moves towards implementing new regulations in the sector.
Russia is considering entering the stablecoin industry amidst a growing trend towards regulatory measures. With increasing financial constraints, Russia sees a digital currency as becoming more essential. The current economic tensions between the US and China have put pressure on the USD, prompting countries heavily affected by tariffs to consider reducing their reliance on the dollar.
The introduction of a ruble-backed token could help decrease Russia's dependence on USDT and USDC, both pegged to the US dollar. This transition would align with Russia's long-term goal of moving away from dollar-based trade transactions.
Although the head of Russia's central bank, Elvira Nabiullina, remains hesitant about using cryptocurrencies for domestic payments, she has acknowledged that some Russian companies are experimenting with international crypto transfers as part of a government trial.
Past discussions have hinted at Russia's interest in stablecoin projects. In 2023, the country's central bank reportedly explored the idea of a gold-backed digital currency in collaboration with Iran, intended for cross-border transactions and as an alternative to the dollar.
It has been noted that Russian businesses have already begun utilizing Bitcoin and other cryptocurrencies for international trade activities.
The urgency for Russia to delve into stablecoin initiatives heightened after Tether restricted wallets on the Garantex exchange, resulting in the freezing of assets exceeding 2.5 billion rubles ($30 million). This took place shortly after Garantex faced sanctions from the European Union.
Simultaneously, Kyrgyzstan is taking steps of its own towards establishing a crypto hub with the support of Binance founder Changpeng Zhao. Central to this endeavor is the creation of A7A5, a stablecoin tied to the ruble that aims to cater to emerging markets.