A new Russian-linked stablecoin, A7A5, has surged to a $500 million market capitalization, becoming the world’s largest non-U.S. dollar stablecoin despite multiple international sanctions.
The stablecoin, issued in Kyrgyzstan and pegged 1:1 to the Russian ruble, now accounts for roughly 43% of the total $1.2 billion non-dollar stablecoin market, according to data from CoinMarketCap and DeFiLlama.
Source: DefiLlama
Its rapid ascent has raised alarms among Western regulators who believe the project could be helping Russia skirt financial restrictions imposed after its 2022 invasion of Ukraine.
A7A5 was launched in February by A7, a cross-border payments firm owned by Moldovan fugitive banker Ilan Shor and Russia’s state-owned lender Promsvyazbank (PSB). Both entities are under U.S., U.K., and European Union sanctions.
The token was introduced as a “digital ruble” backed by fiat deposits in Kyrgyz banks, offering holders a daily passive income equivalent to half the interest on those deposits.
Initially issued on Ethereum and Tron, A7A5 positioned itself as a tool for international settlements with Russian trade partners.
Soon after its debut, blockchain investigators linked the project to Grinex, a crypto exchange viewed as the successor to the sanctioned Russian platform Garantex. The U.S. Treasury sanctioned Garantex and related entities in August, identifying Shor as a co-owner of A7A5’s issuer, alongside Promsvyazbank.
The U.K. followed with sanctions against several Kyrgyz banks, citing evidence that Moscow was using the stablecoin network to bypass the Western financial system.
Despite these sanctions, A7A5’s market value remained stable through the summer before exploding in late September. On September 25, its market cap jumped by $350 million in a single day, a 250% increase, overtaking Circle’s euro-pegged EURC as the leading non-dollar stablecoin.
Blockchain data from Elliptic shows that more than 41 billion A7A5 tokens were in circulation by September 26, with total transaction volumes exceeding $68 billion.
The project’s Telegram channel celebrated the milestone, claiming A7A5 had “proven that a national digital currency can be not only an alternative to the dollar but also a driver of global change.” However, Western authorities view it differently.
Earlier today, Bloomberg reported that the European Union is preparing to impose new sanctions on A7A5, prohibiting any transactions involving the token by EU-based entities.