Russia’s New Crypto Rules May Effectively Ban USDT Trading

Central Bank Tightens Grip on Stablecoins

Russia’s Central Bank has introduced new crypto regulations that could effectively ban the trading of Tether (USDT) within the country. While not explicitly named, experts believe the broad language used in the rules targets most USD-pegged stablecoins, particularly those linked to nations imposing sanctions on Russia.

New Sandbox Rules in Focus

These rules are part of the Central Bank’s crypto sandbox framework, aimed at allowing international crypto-based settlements under strict supervision. Set to take effect on May 26, the rules specify that coins traded within the sandbox:

-Must not be associated with “hostile” countries

-Should originate from or operate in “friendly” jurisdictions

-Cannot be controlled or frozen by issuers or intermediaries

-This essentially excludes stablecoins like USDT, which may be blocked or frozen at the issuer’s discretion.

Experts Confirm Likely Ban on USDT

Legal and crypto experts affirm that USDT does not meet the Central Bank’s new criteria. Mikhail Uspensky, a key member of Russia’s crypto regulatory council, confirmed that USDT is unlikely to be permitted for circulation. However, use in cross-border settlements remains allowed, offering some flexibility for businesses.

Control and Compliance Concerns

Georgy Gukasyan, a legal expert at DRT, noted that Tether’s KYC/AML compliance policies align with Western sanctions, meaning they can refuse redemption or freeze tokens held by Russian users. A recent example includes Tether freezing millions in USDT from the sanctioned Garantex exchange after a U.S. crackdown.

Implications for the Russian Crypto Landscape

While these new regulations aim to align Russia’s crypto trade with its geopolitical stance, they also signal a shift toward more localized and controllable digital assets—potentially driving innovation within Russia's borders, but limiting access to globally dominant stablecoins.

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