The Russian Constitutional Court will rule on whether USDT enjoys property rights, potentially setting a judicial precedent for stablecoins.

Odaily reports that Russia's Constitutional Court is hearing a crucial case to determine whether citizens have property rights to stablecoins such as USDT. Several regulatory experts have told the court that fiat-pegged stablecoins like USDT do not fall under Russian law's category of "digital financial assets" (DFA) and are not subject to the country's rules governing the circulation of digital currencies.

The case stems from a Moscow resident, Dmitry Timchenko, who lent 1,000 USDT in 2023, only to have the lender refuse to return it. His appeals to the district court, the higher court, and the Supreme Court were all rejected, with the courts ruling that stablecoins do not fall under the category of protected DFAs. Timchenko subsequently appealed to the Constitutional Court, arguing that "no other asset class in Russia faces such restrictions."

At the hearing, both the central bank and the anti-money laundering agency Rosfinmonitoring stated that stablecoins possess characteristics of "foreign currency digital assets," making them difficult to classify as DFAs, and proving ownership on public blockchains presents challenges. Some legal experts argue that if stablecoins are not classified as DFAs, it would actually benefit ordinary traders in their daily transactions or in circumventing sanctions, but the lack of legal protection also increases the risk of the issuer freezing assets.

The final ruling in this case is expected to be released privately within weeks and is considered a significant precedent for judicial recognition of stablecoins in Russia. (DL News)