The trading volume of the Russian Ruble stablecoin A7A5 has exceeded 41 billion USD! Is it becoming a new tool to evade Western sanctions?

Question

A recent report from the blockchain research company Elliptic reveals that the ruble-pegged stablecoin A7A5, with Russian connections, saw a surge in trading volume in July, exceeding $41 billion, with daily trading amounts surpassing $1 billion. This stablecoin, launched in Kyrgyzstan by the sanctioned Russian bank PSB and payment company A7, is becoming a key tool for Russian enterprises and individuals to evade Western financial sanctions and facilitate cross-border payments, especially for trade settlements between China and Russia, but it has also sparked serious compliance controversies and regulatory scrutiny.

Financial Breakthrough Under Western Sanctions: A7A5 Emerges

Since the outbreak of the Russia-Ukraine conflict in February 2022, comprehensive sanctions from the West (especially the exclusion of major Russian banks from the SWIFT global financial messaging system) have severely limited Russia's options for international trade payments. In search of an alternative for cross-border payments, the sanctioned Russian defense sector bank Promsvyazbank (PSB) and the payment company A7 jointly launched the ruble stablecoin A7A5 in Kyrgyzstan at the end of 2024, which officially went live in January 2025 and was promoted as a powerful tool for foreign trade payments.

Volume Surge: Daily Exceeds 1 Billion, Total Exceeds 41 Billion

Elliptic released a report on Monday (the date of the report) indicating that A7A5 experienced a significant surge in volume in July. Their analysis shows that currently over $1 billion is transferred daily through A7A5, and the cumulative total has reached $41.2 billion. The report particularly highlighted the surge in volume, liquidity, and the number of circulating tokens in July. Another blockchain analytics company, TRM Labs, also observed a similar scale of total transaction volume. The surge in demand even tripled A7A5's market capitalization to $521 million in less than two weeks.

Operating Mechanism: Pegged to the Ruble, Bridging USDT, Avoiding Traditional Finance

A7A5 claims to be backed 1:1 by ruble deposits held by PSB. Its design allows users to:

Purchase A7A5 on the Ethereum or Tron blockchain.
Exchange it for Tether (USDT) on a decentralized exchange (such as A7A5 DEX).
Ultimately extract multiple fiat currencies globally. This mechanism essentially circumvents the traditional cross-border payment services that sanctioned Russian banks cannot provide, making it a potential sanctions evasion payment solution and alternative channel for Russia's cross-border trade settlement.

Platform and Users: Highly Centralized, Questionable Model

The main trading platform for A7A5 is the cryptocurrency exchange Grinex, headquartered in Kyrgyzstan. Since its launch, Grinex has processed over $9.3 billion in A7A5 transactions. However, the activity is highly concentrated: only 124 wallets dominate most of the volume, indicating that its main users are likely a few high-volume institutions or traders for internal financial operations rather than widespread retail adoption. Elliptic also found that transactions exhibit rigid and repetitive patterns, particularly during Moscow working hours, suggesting organized financial operations rather than natural market activity.

Liquidity Injection and High Demand: USDT Becomes a Key Hub

In response to the soaring demand, the A7A5 team announced on Telegram on Monday that they have injected $100 million worth of fresh USDT liquidity into the A7A5 DEX. The team claimed, "The demand to exchange A7A5 for USDT at the best exchange rate remains high, and the liquidity was consumed within minutes." As a key exchange bridge, USDT's issuer, Tether, which claims to regularly collaborate with global law enforcement to freeze illegal funds, did not immediately respond to requests for comment.

Background Controversy: Sanctioned Parties and Suspicious Entities

The background of A7A5 has raised many compliance doubts:

PSB and A7: The core initiator PSB Bank is subject to Western sanctions due to its association with the Russian defense sector; the payment company A7 is linked to the controversial Moldovan oligarch Ilan Shor. Although the A7A5 team claims to have severed ties with Shor's A7 project in May 2025 due to strategic differences, Shor himself continues to publicly promote the stablecoin at the St. Petersburg International Economic Forum.
Grinex Exchange: Seen as the "successor" of the Russian exchange Garantex, which was shut down by U.S. authorities, according to blockchain analysis firms (Elliptic, Global Ledger). Garantex was accused of facilitating over $60 billion in illegal trades. Analysts believe Grinex has inherited Garantex's user base and liquidity.
Kyrgyzstan Entity Network: TRM Labs identifies A7A5 as part of a newly registered entity network in Kyrgyzstan that uses cryptocurrency to evade sanctions, which likely also involves the transit of dual-use goods from China to Russia through Central Asia.

Russia's Strategic Shift: Embracing Cryptocurrency to Evade Sanctions

The rise of A7A5 coincides with Russia actively developing alternative payment systems under Western sanctions. Russian officials, including the finance minister, have publicly supported the use of cryptocurrencies like Bitcoin for international trade settlement, marking the country's broader shift towards utilizing digital assets to evade sanctions and seek a Russian financial breakthrough plan.

Market Performance and Concerns: High Turnover Rate and Transparency Issues

Despite the huge volume, the circulating market value of A7A5 is relatively small (around $151 million), with a circulating token amount reaching 12 billion coins. This means that each token is transferred multiple times daily, and the extremely high turnover rate supports the massive trading volume, which has also sparked speculation about its use for large-scale cross-border trade (especially on the bank-restricted routes between China and Russia and Central Asia). Analysts are skeptical about its broader applications due to the high concentration of transactions and the seemingly unclear sources of many capital flows.

Team Advocacy: Meet the Demand for Non-USD Stablecoins

The A7A5 team insists that this stablecoin meets the legitimate demand for non-USD stablecoins (especially ruble stablecoins), serves as a transparent tool, and regularly publishes reserve audit reports. The approximately 7.84% annual yield (derived from ruble deposit interest) has attracted about 24,000 holders, mainly distributed in Russia and CIS countries.

Conclusion: The regulatory sword hangs high, the future is full of variables

The rapid rise of A7A5 vividly demonstrates the potential of cryptocurrency to circumvent geopolitical financial blockades, especially in the context of Russia seeking de-dollarization payment paths and external trade settlements for sanctioned economies. However, its close ties to sanctioned entities, highly centralized trading models, dubious exchange backgrounds, and concerns over potentially facilitating sanction evasion and illicit flows of funds have made it a focal point of scrutiny for global regulators. As the international community continues to tighten regulations on cryptocurrencies, the future of A7A5 is filled with uncertainty: will it become a lasting fiat deposit and withdrawal tool in the global crypto economy, or will it be the next target of regulatory crackdowns? Its fate will profoundly impact Russia's strategy effectiveness in using digital currencies to break free from financial isolation and provide a key case study for global stablecoin regulation. Its developmental trajectory deserves close attention from cryptocurrency users, compliance practitioners, and policymakers.