A Russian financial analyst has warned that US President-elect Donald Trump could impose sanctions on stablecoin issuers, potentially targeting tokens like USDT. Artem Zvezdin, a financial analyst and trader, told News.ru that such sanctions could lead to Russian-held tokens facing a fate similar to the freezing of the country’s gold and foreign exchange reserves following the outbreak of the war in Ukraine.
Stablecoins at Risk?
Zvezdin explained that billions of dollars’ worth of Russian assets were frozen by Western nations in 2022, and stablecoin issuers pegged to the US dollar could find themselves facing a similar situation. According to Zvezdin, these issuers may be forced to choose between unpegging their tokens from the dollar or risking having them “completely frozen” by US sanctions.
Several Russian media outlets and experts have speculated that Russian firms are increasingly turning to stablecoins to circumvent Western sanctions. This allows them to trade internationally while avoiding reliance on Bitcoin (BTC), which the Russian Central Bank has previously criticized due to its decentralized nature and potential for volatility.
Zvezdin pointed out that Trump could target companies issuing stablecoins, imposing sanctions on those “accountable to the US.” In this case, he suggested that stablecoin holders could lose access to their assets, leaving them with “nothing more than a few numbers on a screen.”
The Pegging Dilemma
Stablecoin issuers, particularly those pegged to the US dollar, typically maintain their peg by holding US Treasury bonds, stocks, and other traditional financial assets. This ensures that one stablecoin equals one US dollar in value. However, Zvezdin warned that sanctions on these companies could disrupt this equilibrium, making it harder for stablecoins to maintain their dollar peg.
Washington is already concerned about the use of cryptocurrency as a tool for evading sanctions, and Zvezdin argued that US authorities are particularly focused on the role of Russia, Iran, and North Korea in using crypto for cross-border payments. The US government may also view the rise of crypto-powered international settlements as a threat to the US dollar’s dominant role in the global financial system.
Rising Crypto Adoption in Russia
Despite the risks, crypto adoption is on the rise in Russia, with many firms using stablecoins and other digital assets for trade. Moscow also sees its rapidly growing crypto mining industry as a potential asset in bolstering the country’s economy. However, this growth has come with challenges: home-based mining operations have caused power grid issues, and some lawmakers have expressed concerns about the economic impact of private mining activities.
With increasing global scrutiny on crypto’s role in sanction evasion, Zvezdin’s warning reflects the growing tension between the rise of digital currencies and traditional financial systems, particularly in countries like Russia that are seeking ways to circumvent Western sanctions.
