EU weighs sanctions against ruble-backed Stablecoin A7A5: report

The European Union is reportedly considering sanctions against A7A5, a Russian ruble-backed stubcoin and the world’s largest non-US pegged stablecoin.

The sanctions would prohibit EU-based organizations and individuals from engaging directly or indirectly through third parties with the token, according to a Bloomberg report on Monday, citing documents related to the proposal.

According to Bloomberg, several banks in Russia, Belarus, Belarus, and Central Asia are also on the firing line, accused of allowing their licensed entities to conduct crypto-related transactions.

It is the EU’s latest effort to thwart the Russia-bound crypto movement, following September 19 sanctions on crypto platforms that blocked all transactions for Russian residents and restricted transactions with foreign banks tied to the country’s sectors.

Cryptocurrency is just one of the many methods Russia has used to try to circumvent Western sanctions.
Russia also uses a so-called shadow fleet, with hundreds of vessels smuggling sanctioned goods, concealing the origin of the oil, and intermediary trade through other countries, among other methods.

At the same time, it is laundering money using illegal gold transactions, global policy think tank Kland said in a December 2024 report.

A7A5 market capitalization skyrocketed after sanctions

A week after EU sanctions against Crypto platforms were announced on September 19th, A7A5’s market capitalization went from approximately $140 million to over $491 million, a 250% jump in one day, according to CoinMarketCap.

A7A5’s market capitalization surged 250% in the week since the EU first imposed sanctions. sauce: coinmarketcap

A7A5’s market capitalization is currently stable at around $500 million as of Monday. This is about 43% of the non-USD stub line’s market capitalization of about $12 billion. Circle’s Euro division is the second largest, with a market capitalization of approximately $255 million.

EU sanctions require the support of all 27 member states before receiving approval and can be amended or changed before being implemented, according to Bloomberg.

The Council of Europe describes sanctions as a “tool aimed at holding people accountable for policies or actions that the EU wishes to influence” and as a way to “bring about changes in the policies or actions of targeted persons in order to further the EU’s general foreign and security policy objectives.”

EU joins US and UK with sanctions

The EU sanctions followed similar restrictions imposed by the UK and US in August. It targeted parts of the financial sector allegedly used by Russia to bypass Western sanctions, including the Central Asian Capital Bank and its director Kantemir Charbayev.

Kyrgyzstan Crypto also blacklisted Greenex and Meer, the central Asian countries that issue A7A5, replacing entities tied to the infrastructure supporting the ruble-backed stubcoin.

A7A5 was launched on Ethereum and the Tron network in February by Moldovan banker Ilan Shor and Russian state-owned lender Promsvaazbank. It was billed as a “token backed by a diverse portfolio of fiat deposits held in trusted banks within the Kyrgyzstan network.”

Despite sanctions and bans by Singapore, the company behind A7A5 appeared at Token2049 and held a booth there. Executive Oleg Ogiyenko also spoke on stage.

However, organizers later removed the project from the event and its website.