20-5-2025 – The Central Bank of Russia (CBR) has unveiled stringent regulations targeting foreign digital assets, set to take effect on May 26, 2025. These measures, aimed at so-called “foreign digital rights” (FDRs), are poised to reshape the landscape for cryptocurrencies, particularly stablecoins like Tether (USDT), within Russia’s rapidly expanding $10 billion digital asset market.
The CBR’s latest directive stipulates that FDRs—digital instruments traded in Russia since August 2024 under the “On Digital Financial Assets” law—must adhere to rigorous criteria. Unlike Russia’s domestic digital financial assets (DFAs), which are tokenized representations of tangible assets built on blockchain technology, FDRs face additional scrutiny. A key condition mandates that these assets must not be tied to securities from nations Russia deems “unfriendly.” Furthermore, issuers or their agents must not retain the ability to freeze or block these assets, a rule that could significantly impact stablecoins like Tether, which has a global market capitalisation exceeding $151 billion.
Kristina Aleshina, Deputy Director of the CBR’s Financial Market Infrastructure Department, revealed at a recent Saint Petersburg forum that DFAs have already amassed 800 billion rubles (approximately $9.9 billion) by the first quarter of 2025. This growth underscores Russia’s increasing engagement with digital assets, yet the CBR remains cautious, seeking to restrict access to FDRs to only “highly qualified” investors. However, as Ignat Likhunov, founder of the crypto-specialised Cartesius law firm, points out, the regulator’s ability to enforce comprehensive control is limited, given that peer-to-peer crypto transactions and ownership remain permissible.
The new rules could spell trouble for Tether, a dominant stablecoin used in 80% of Russia’s cross-border transactions, according to Likhunov. Experts like Georgy Gukasyan, director of the tax and legal department at DRT (formerly Deloitte’s Russian branch), argue that Tether’s structure, which allows its issuer to freeze assets at will, fails to meet the CBR’s criteria. This vulnerability was starkly illustrated in March when Tether froze assets worth 2.5 billion rubles on the sanctioned Russian crypto exchange Garantex, accused by U.S. authorities of facilitating money laundering and sanctions violations. Mikhail Uspensky, a member of Russia’s cryptocurrency regulation council, asserts that Tether will likely be barred from circulation, though its role in foreign trade may persist.
Despite these restrictions, the Russian market’s appetite for stablecoins remains robust. Likhunov predicts that intensified regulatory pressure could drive users towards decentralised alternatives like DAI, which operate beyond the reach of centralised issuers. Meanwhile, Russia’s finance ministry is exploring the creation of a homegrown stablecoin pegged to an alternative fiat currency, a move prompted by Tether’s compliance with international sanctions that complicates redemption for Russian users.
