A stablecoin created to circumvent Western sanctions and facilitate international payments related to Russia moved about $9.3 billion in just four months. Launched in February in Kyrgyzstan, the A7A5 token is a cryptocurrency backed by the Russian ruble and primarily operates on the Grinex exchange, a platform recently established in the same Central Asian country.
Stablecoins are a type of cryptocurrency whose value is linked to another asset, such as a fiat currency or gold, to maintain a stable price and avoid heavy fluctuations.
The information about the case was collected by the Financial Times based on data from wallets associated with Grinex, which trades only three assets: A7A5, rubles, and a dollar-pegged stablecoin. The stablecoin in question claims to be backed by ruble deposits in Promsvyazbank, a Russian defense sector bank that is under sanctions from the United States, European Union, and United Kingdom.
The token is associated with Moldovan businessman Ilan Șor, convicted for involvement in the largest banking fraud in the history of Moldova. Șor currently lives in Russia and has been accused of orchestrating vote-buying schemes in his home country. The A7 company, behind the currency, was sanctioned by the UK in May and, according to the British Center for Information Resilience, has connections to pro-Russia political influence operations in Moldova.
Grinex, the exchange that concentrates the volumes of the new digital currency, has drawn attention due to its ties with the Garantex brokerage, which was shut down by the US in March under allegations of money laundering. According to investigators, millions of dollars in USDT (dollar-pegged stablecoin) migrated from Garantex to A7A5 and then to Grinex, in a possible coordinated move to keep assets in circulation.
What is the currency used for?
The cryptocurrency has been used by Russian importers to convert rubles into USDT and, from there, withdraw in other currencies in different countries, circumventing Western sanctions. The director of A7A5, Leonid Shumakov, claims that the currency is a safe alternative in light of the blocking of Russian assets by Western platforms. The company states that each token is backed by a ruble deposited in Promsvyazbank, with an audit conducted by a local firm in Kyrgyzstan.
The choice of the Asian country as the operational center for the Russian stablecoin is also not by chance. Kyrgyzstan has had ties with Moscow since the times of the Soviet Union, when it was part of the socialist territory, until it declared independence in 1991.
Even with the dissolution, Kyrgyzstan has remained under strong Russian influence, integrating the Eurasian Economic Union and the Collective Security Treaty Organization, both coordinated by the Kremlin.
Even with the origin and financial flows under suspicion, the stablecoin continues to grow and transact normally. There are 12 billion tokens in circulation, equivalent to $156 million, although the actual transaction values exceed this total daily, according to the FT.
Most transactions occur on weekdays and during Moscow's business hours. Analysts point out that A7A5 is being used by a select group, possibly for strategic or political purposes.