Russia’s Central Bank Blacklists Tether in Latest Crypto Crackdown

Moscow draws a hard line—stablecoins now persona non grata in Russia’s financial ecosystem.

The Central Bank’s new guidelines explicitly exclude Tether and other ’unbacked’ digital assets from approved settlement methods. Another blow for crypto’s wild west—but hey, at least the ruble’s volatility looks tame by comparison.

Countdown for USDT Begins with New Regulations

The Central Bank of Russia’s guidelines classify altcoins that do not comply with the “unblockable” definition as risky. Although the document does not specifically name Tether, its recent action of freezing wallets linked to the Russian exchange Garantex is considered a significant reference. Legal advisor Mihail Uspenskiy noted, “Any asset capable of complying with US sanctions is automatically eliminated,” meaning that investors’ access to Russian ruble-USDT pairs could be severed during platform license renewals.

Another guideline stipulates that the issuer’s base should be in jurisdictions regarded as “friendly.” Being based in the USA, Tether’s alignment with Washington’s sanctions lists makes it incompatible with this criterion. According to Georgy Gukasyan, the legal director at DRT, “USDT is theoretically not banned, but all technical criteria effectively close the door on it.” Exchanges are expected to face pressure to freeze local wallets.

Continued Exploration of Cross-Border Payment Balance

Nevertheless, the Central Bank of Russia does not entirely shut the door on USDT for foreign trade participants. Its sandbox program still approves stablecoin use in cross-border payments if the counterpart country permits it. The objective is to enable exporters to integrate with global supply chains without being restricted to the Russian ruble. Additionally, the institution has opened the DFA model, run with gold-backed altcoins, to foreign companies, although account opening procedures remain slow and bureaucratic.

The second pilot program concerns direct cryptocurrency payments in imports and exports. Initial transfers under the program commenced in December. As the program expands, tests for the digital Russian ruble and a multilateral central bank digital currency bridge termed “BRICS Bridge” are progressing. While navigating around sanctions, Moscow is seeking a clear roadmap, and regulators are experimenting with blockchain solutions that offer instant reconciliation.

Experts suggest that Russian companies may still receive export payments through USDT in the short term, but local transaction restrictions could reduce liquidity. If liquidity shrinks, widening spreads could increase trading costs for individual investors, rendering the market dysfunctional as if an official ban were imposed.