EU Weighs Sanctioning Russia-Connected A7A5 Stablecoin

The European Union reportedly proposed sanctions on a ruble-backed stablecoin called A7A5.

The coin is tied to Russians who are themselves under sanctions, Bloomberg reported Monday (Oct. 6), citing EU documents.

The restrictions would prohibit any engagement, directly or indirectly, by EU-based entities in transactions involving the token. The bloc is also set to target several banks in Russia, Belarus and Central Asia for enabling cryptocurrency-related transactions, the report said.

A7A5 was developed by A7, a cross-border payments company owned by Moldovan fugitive banker Ilan Shor and the Russian state-owned lender Promsvyazbank (PSB), according to the report. A7 and its subsidiaries help Russian businesses carry out international transactions that are otherwise disrupted due to restrictions in the United States.

PSB and A7 have been sanctioned in response to Russia’s invasion of Ukraine, the report said. However, A7’s business is expanding. The company has launched a digital bill of exchange for international settlements through its subsidiary, A7-Kyrgyzstan.

As of Sept. 26, there were 41.6 billion A7A5 tokens in circulation, valued at $496 million, according to the report. Total A7A5 transactions as of that date were valued at $68 billion.

The news came days after the stablecoin market topped $300 billion in value, hitting a new all-time high. The stablecoin market has increased by 42% this year, double the 21% growth of the overall cryptocurrency market.

“The rapid progression hints at a key aspiration,” PYMNTS wrote Friday (Oct. 3). “Rather than serving solely as crypto’s payments plumbing, stablecoins now have their eye on being refactored as a building block for next-generation payments, treasuries and capital markets. [The industry is] at an inflection point.”

Stablecoins reaching the $300 billion mark is not the finish line; it’s the “starting gate for the next race,” the report said. Now, stablecoins must transform into a globally trusted infrastructure.

In a separate report Friday, PYMNTS wrote about stablecoins’ emergence as “connective settlement layers in B2B cross-border flows,” helping finance chiefs manage liquidity more efficiently. When reporting second-quarter earnings results in July, Coinbase co-founder and CEO Brian Armstrong said cross-border stablecoin payments would likely present a $40 trillion opportunity, with the B2B market accounting for three-quarters of that.