The new law aims to build a compliance pipeline under the name of the state; A7A5 is walking a completely different path.

Written by: Conflux

Russia has just written into law that "allows foreign trade participants to use digital currency for settlement in cross-border transactions." In fact, a ruble stablecoin has been on this path for more than a year already—it’s called A7A5.

The new law aims to build a compliance pipeline under the name of the state; A7A5 is walking a completely different path.

A Coin Grown from Kyrgyzstan

In February 2025, Old Vector, a company registered in Kyrgyzstan, minted the first batch of A7A5, pegged to the ruble, with reserve assets stored in the core blood bank of the Russian defense system—the Promsvyazbank (PSB), which has been sanctioned by the West for many years. Furthermore, the A7 network, to which this stablecoin belongs, has been identified by the U.S. Treasury as being related to Moldovan oligarch Ilan Shor. Shor himself was sentenced in absentia for a billion-dollar bank fraud case, and is subject to sanctions from the U.S., U.K., and other countries.

Reports state that by January 2026, A7A5's cumulative on-chain transaction volume exceeded 10 billion dollars, becoming one of the world's largest non-dollar stablecoins in less than a year, with approximately 250,000 transfers and over 41,000 accounts. This background destined it from day one to not be an ordinary stablecoin project.

The Coin that "Suffers the Least Pressure"

A7A5's most counterintuitive piece of history is its response to sanctions—not shrinkage, but expansion.

In August 2025, the U.S. Treasury targeted A7A5's main trading venue Grinex, yet the trading volume of this stablecoin did not shrink as expected; instead, its market value increased, nearing 500 million dollars in a short time, accounting for over 40% of the total market value of non-dollar stablecoins at that time.

Reports citing on-chain data suggest that a considerable proportion of tokens in the A7A5 network have undergone destruction and reminting in new wallets after being sanctioned at associated exchanges. This method can objectively sever the connection between frozen addresses and new tokens. However, it should be noted that specific proportions and triggering points currently lack formal reports for cross-verification from primary on-chain analysis agencies like Elliptic or TRM Labs, making it a detail worth continuous observation but not yet substantiated.

Regardless of whether these specific operational details can eventually be verified, a more fundamental fact is sufficient to illustrate the issue: Garantex was shut down, Grinex was sanctioned, yet this coin did not perish; instead, it grew stronger. This at least indicates that relying on freezing a few trading platforms to strangle a crypto settlement channel is far less effective than imagined.

An Identity Gained from a Letter

The reason A7A5 has survived to today is not only due to these countermeasures but also a clever legal façade.

In 2021, Russia enacted the "Digital Financial Assets Law" (259-FZ), allowing licensed "information system operators" to issue regulated digital financial assets (DFA), which must be on a private blockchain and issued by licensed entities like Sberbank or Alfa-Bank—this sounds completely different from a public chain stablecoin like A7A5.

However, according to an analysis by Harvard University's Davis Center, in October 2025, the Russian central bank issued a "non-objection letter," which some research institutions interpreted as a tacit acceptance from Russian regulatory authorities for the cross-border use of A7A5. It's important to remind that this is still the analysis phrasing of research institutions regarding the actions of the Russian central bank, rather than an official qualification publicly used by the Russian central bank.

The formal identity of A7A5 is actually "foreign-issued digital rights" (FDR), which does not fully comply with the original design intentions of 259-FZ, but the regulatory authorities chose to tacitly allow it. This is the path that A7A5 has taken over the past two years: there has been no specific law tailored for it, but rather, a vague document from the central bank has pried open the doors of cross-border settlements.

The Broad Road and the Narrow Bridge

The new law from the Duma officially paves this sidetrack into a thoroughfare—the settlement of foreign trade contracts is allowed to use digital currency, directly written into the law, no longer requiring a vague letter from the central bank.

However, the new law establishes a domestic registry: exchanges, clearing institutions, and brokers must all enter the registry of the Russian central bank, and banks and financial institutions will face stricter compliance requirements. A7A5 is precisely the opposite—the issuer is in Kyrgyzstan, and the trading venues are overseas exchanges and public chain DeFi protocols, with its cross-border structure objectively reducing the impact of a single jurisdiction's freeze.

This leaves A7A5 with a paradox under the new law: to enjoy compliance dividends, it needs to align with the domestic registry; yet once it creates clear institutional and funding traces, the protective moat it prides itself on—"capable of being reminted at any time, hard to freeze"—would also be weakened.

The new law requires a visible and manageable state-operated pipeline; the value of A7A5 is exactly based on the unseeable and unmanageable aspect. Whether the two can be compatible remains a suspense.

After the Ceasefire, Who Exits First

What truly makes A7A5 anxious is not the sanctions themselves, but the possibility that they might end.

As rumors of a ceasefire between Russia and Ukraine heat up, A7A5 executive Oleg Ogienko openly stated: even if sanctions are lifted, this coin still has reasons to survive—faster and more convenient cross-border settlement. This sounds confident, but from another perspective, it is also restless: once the sanction soil that supports its existence disappears, how will it compete with liquidity-crushing dollar stablecoins?

The new law from the Duma is not truly preparing for another stablecoin, but a set of national-level digital asset cross-border settlement systems. In the past, Russia relied more on market-oriented solutions like A7A5; in the future, whether it's a new compliant stablecoin, regulated digital financial assets, or the digital ruble, all may play different roles within this institutional framework, without having to bet cross-border settlement capabilities on a token already deep in the storm of sanctions.

Interestingly, the Russian central bank also plans to continue promoting the broader application of the digital ruble. The institutional framework and central bank digital currency are advancing almost simultaneously, indicating that Russia is attempting to gradually transition from relying on a spontaneously formed "shadow settlement network" to a state-led, regulatorily controllable digital settlement system.

A token that survives through repeated maneuvering, a law that has just gained legal identity yet requires traceability at every turn, and a digital ruble issued personally by the central bank—all three are running simultaneously. What sanctions have truly forced out is never just a single brilliant design, but a complete set of mutually supportive survival systems.

Who will be the first to be eliminated? Who can survive until after the ceasefire?