FT: Russia bypasses sanctions and makes payments using cryptocurrency

The cryptocurrency in question is A7A5. The publication claims that in the four months since its launch, almost $9.5 billion has passed through this cryptocurrency.

Russia is circumventing sanctions and solving payment problems with a cryptocurrency launched in Kyrgyzstan that is tied to the ruble. At least, that's what the Financial Times claims in its big article. It's about the A7A5 cryptocurrency. The publication claims that in just four months since its launch, almost $9.5 billion has passed through this cryptocurrency.

A7A5 is a stablecoin. This is the name given to a cryptocurrency that maintains its stable value by being tied to a specific real currency. For example, USDT is tied to the US dollar, and A7A5 is tied to the Russian ruble at a 1:1 ratio.

The digital currency was launched in Kyrgyzstan in February this year. The asset’s website states that its value is backed by ruble deposits in Russia’s Promsvyazbank. The Financial Times claims to have analyzed crypto wallets linked to the Grinex exchange, where A7A5 is traded. According to this analysis, $9.3 billion worth of transactions with this crypto have been made between these wallets over four months.

Most of these transactions “follow rigid fixed patterns,” so it is assumed that they may be used as part of an internal banking process. While it is impossible to confirm the connection of these wallets to Russia, the transactions occur almost “exclusively on weekdays, often during working hours of Moscow offices.”

The publication writes that A7A5 is backed by A7, a payment agent and fintech service owned by Moldovan businessman Ilan Shor. It is noteworthy that he came to the recent St. Petersburg Economic Forum, where he said that A7 offered the market a “slightly new” and “fairly invulnerable” product — essentially, securities payments. Shor did not specify what securities he was talking about, the Vedomosti newspaper noted at the time.

A7A5 said it “worked with A7’s technical team early on,” but in June “decided to separate completely due to different visions for development strategy.” A7 is currently under UK sanctions. Its head, Ilan Shor, was involved in talks with Kyrgyzstan’s Keremet Bank last year, according to the US Office of Foreign Assets Control, to create a “sanctions evasion center for Russia” so it could pay for imports and receive money for exports. The US imposed sanctions on Keremet in January.

Some market participants confirmed to Business FM off the record that such a stablecoin is used in settlements by Russian state-owned companies; it is convenient in that it is essentially trading in rubles.