Russia's Stablecoin Ruling Could Redefine Digital Property Laws

The Russian Constitutional Court is set to deliver a landmark ruling that could redefine the legal status of stablecoins like Tether's USDT and establish whether they qualify as property under Russian law. The case, rooted in a 2023 civil dispute over a $1,000 USDT loan, has drawn the attention of top regulators, including Central Bank Deputy Chairman Alexey Guznov and officials from the Ministry of Finance, as the court grapples with the implications of existing digital financial assets legislation.

At the heart of the dispute is Moscow resident Dmitry Timchenko, who sued a borrower after the latter allegedly refused to repay the loan. Lower courts dismissed the case, ruling that Russia's DFA laws--enacted in 2021--do not apply to stablecoins like USDT, which are pegged to fiat currencies and issued by foreign entities. Timchenko's legal team argues that such a stance is unconstitutional, as it imposes unique restrictions on a form of property not seen in other asset classes.

The court's deliberations have highlighted deep divisions among experts. Guznov described USDT as a "monetary surrogate", emphasizing the challenges of proving ownership on public blockchains. Meanwhile, Rosfinmonitoring officials asserted that voluntary reporting, rather than blockchain monitoring tools, remains the only reliable method to establish stablecoin ownership. Federation Council member Andrei Klishas further noted that USDT functions more as a "foreign digital property" than a digital currency.

This legal ambiguity contrasts with recent legislative shifts in Russia, where lawmakers have begun treating cryptocurrency as property in criminal cases. A newly adopted bill, currently in its final parliamentary reading, allows law enforcement to seize and confiscate crypto assets during investigations. The law, which aligns with existing judicial practices, mandates procedures for transferring seized crypto to secure wallets and collaborating with foreign exchanges. Legal experts like Mikhail Uspensky have called the amendments long overdue, noting that courts have already recognized digital assets as property in civil contexts.

The stakes extend beyond Russia's borders. The stablecoin market has surged to $303 billion in 2025, with US Treasury Secretary Scott Bessent projecting a tenfold growth to $3 trillion by 2030. Analysts warn that a ruling excluding stablecoins from DFA protections could embolden traders to use them for everyday transactions or sanctions evasion, while exposing them to risks like sudden issuer freezes.

The Constitutional Court is expected to deliver its decision in a closed session by year-end. If the court sides with Timchenko, it could force a revision of Russia's DFA framework to accommodate stablecoins. Conversely, upholding the lower courts' stance might reinforce the distinction between domestically issued DFAs and foreign-pegged tokens like USDT.