Russia Should Develop Its Own Stablecoin to Avoid Outside Interference (CoinChapter.com)

Osman Kabaloev, deputy director of the Finance Ministry's financial policy department, said Russia should develop its own stablecoin.

Yerevan (CoinChapter.com) – Osman Kabaloev, deputy director of the Finance Ministry’s financial policy department, said on April 16 that Russia should develop its own stablecoin.

His comments followed the March 6 wallet freeze affecting the Russian crypto exchange Garantex.

Reuters and TASS reported Kabaloev as saying,

We do not impose restrictions on the use of stablecoins within the experimental legal regime. Recent developments have shown that this instrument can pose risks for us.

He added that Russia may need to develop tools “akin to USDT, potentially pegged to other currencies.” The focus is to avoid outside interference in stablecoin operations.

Garantex was hit by U.S. law enforcement and stablecoin issuer Tether. Together, they froze domains and funds linked to the exchange.

The U.S. Department of Justice said Garantex had processed over $96 billion in criminal funds since 2019. The DOJ said the exchange was used by cybercriminals for ransomware and other activity.

On the same day, Tether announced the lockout of $27 million in USDT tied to Garantex. Issuer CEO Paolo Ardoino said the move was in response to U.S. sanctions.

Due to the domain and wallet freez, Garantex was unable to continue operations and announced the suspension of all services.

Earlier Action From Treasury

The latest action comes after the U.S. Treasury’s Office of Foreign Assets Control sanctioned Garantex in April 2022.

At the time, the Treasury claimed the exchange was involved in money laundering activities related to North Korean cyber actors.

The sanctions targeted Garantex’s CEO, Maxim Ivanov, and chief technical officer, Dmitry Kovalenko.

After the sanctions, Garantex announced it was winding down operations and planned to return user funds.

However, the exchange faced further troubles with the domain and wallet freezures in March 2024.

Swiss blockchain analytics company Artemis said Garantex later reappeared under a different name. According to the firm, the platform was spotted using ruble-backed stablecoins and transferring funds to a newly launched exchange.

The report did not name the new platform but said it had links to the original Garantex setup.

This rebranding attempt followed the $27 million USDT freeze and the complete suspension of services.

Now, the Finance Ministry is highlighting stablecoins as a risk and exploring local alternatives to maintain control and avoid similar events.

Officials Proposed Crypto Fund Earlier In 2024

Earlier in 2024, Evgeny Masharov, a Civic Chamber member, proposed that Russia create a government crypto fund. The fund would hold crypto assets seized during criminal investigations.

Masharov said in March that the initiative was in response to difficulties faced by investigators in handling cryptocurrencies.

His comments came as officials pushed new laws to treat cryptocurrencies as property in court cases. This would allow investigators to use crypto assets in legal procedures.

At present, Russian legislation does not permit the use of cryptocurrencies seized during criminal activity. Instead, they are converted into rubles.

However, officials are working to amend the legislation and introduce provisions for using crypto assets in court cases.

Despite efforts to adjust legal frameworks for digital assets, Russian authorities have yet to pass the proposed legislation.