A new ruble-backed cryptocurrency called A7A5 has been making headlines after it processed more than $40 billion in transfers, according to blockchain research firm Elliptic. The sudden jump in transactions, especially in July, has drawn global attention because the coin is being linked to Russia’s efforts to sidestep Western sanctions and keep cross-border trade moving despite strict financial barriers.
Since the start of the conflict in Ukraine in February 2022, Russia has faced heavy restrictions from Western countries. One of the toughest measures was cutting Russian banks off from SWIFT, the global financial messaging network that most international payments rely on. This made it much harder for Russian companies to send and receive money abroad. In response, Moscow has been searching for alternative systems, and the A7A5 stablecoin has quickly become one of the most important tools in this effort.
A7A5 was launched in January by Promsvyazbank, a Russian lender connected to the defense sector, and payments firm A7. Both organizations are under Western sanctions, but they promoted the new coin as a way to make cross-border settlements smoother and faster. The coin is registered in Kyrgyzstan, a Central Asian country, which researchers say is becoming a hub for financial workarounds linked to Russia and possibly for routing goods from China.
Elliptic’s research shows that more than one billion dollars is now being moved through A7A5 every single day. The stablecoin’s total value in circulation has also grown rapidly, with its market capitalization tripling to $521 million in less than two weeks. Another blockchain research group, TRM Labs, reported similar findings and suggested that A7A5 might even be helping Russia obtain sensitive “dual-use” goods, like electronics and technology, through Central Asia.
The demand for the coin is so strong that A7A5 recently added $100 million worth of the better-known stablecoin Tether into its system to boost liquidity. According to the platform, the option to swap A7A5 for Tether is so popular that the available supply is usually gone within minutes, showing just how quickly traders and businesses are embracing it.
The rise of A7A5 highlights how digital currencies are turning into powerful tools for countries under financial pressure. While the coin is helping Russian businesses move money outside the traditional banking system, it also raises concerns for regulators and governments trying to enforce sanctions. Tether, which has worked with global authorities in the past, has not commented on the situation.
The surge of A7A5 shows how quickly financial technology is changing global trade, and how governments, businesses, and regulators are racing to keep up with this new reality.
Major crypto exchanges, such as Coinbase Global Inc. (NASDAQ: COIN), will be watching how authorities respond to this revelation about the new stablecoin since its use appears to be a workaround to existing sanctions against Russia.
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