What happened? A Russian-linked ruble stablecoin, A7A5, surged to about $500 million in market value despite ties to sanctioned entities.
A7A5 — issued in Kyrgyzstan and pegged 1:1 to the ruble — shot up rapidly in late September, jumping roughly 250% and overtaking other non-dollar stablecoins. The token is tied to A7 (owned by Ilan Shor) and Russia’s Promsvyazbank, both under U.S., U.K. and EU sanctions, yet its supply and transaction volumes exploded. Blockchain data shows tens of billions of tokens and billions in daily flows, pushing A7A5 to roughly 43% of the $1.2 billion non-dollar stablecoin market.
Who does this affect? Regulators, Russian businesses and trade partners, crypto platforms, and users in regions where A7A5 is spreading.
Western authorities are alarmed because the token appears to be used for cross-border settlements that could help sanctioned actors bypass restrictions. Russian firms and trade partners can settle payments faster through A7A5, while banks and exchanges in Kyrgyzstan, China, Central Asia and parts of Africa see increased activity. Crypto venues and institutional players face compliance headaches and potential legal exposure if they touch the token or related flows.
Why does this matter? It shifts liquidity and raises systemic and market risks that could force tighter regulation and reprice non-dollar stablecoins.
A7A5’s rapid rise shows a sanctioned, state-linked stablecoin can capture meaningful market share and redirect cross-border payment flows away from traditional dollar rails. If regulators move to ban or further sanction the token, markets could see sudden liquidity squeezes, trading disruptions, and higher compliance costs across exchanges and stablecoin pools. Broader adoption of similar instruments would raise geopolitical and financial stability risks, likely prompting faster regulatory action and altering how institutional players value non-dollar stablecoins.