February 2026, Hong Kong. Oleg Ogienko is on stage at Consensus Conference. Someone in the audience asks the question everyone is thinking: what happens to A7A5 if Western sanctions on Russia are lifted? He answers with the composure of someone who already knows how this ends: "Our stablecoin has a good chance to stay competitive even after the sanctions are lifted. If you trade with Russia, you need convenient and fast means of settlement."
Three months earlier, in September, Vladimir Putin had joined by video call the inauguration of A7 Finance's branch in Vladivostok. Not an indirect endorsement, not a delegated official: the President of the Russian Federation, live on camera, celebrating the opening of a retail outlet for a stablecoin sanctioned by the United States, the United Kingdom, and the European Union.
These two facts, taken together, say something that standard analysis of Russia sanctions struggles to admit: A7A5 is not a marginal experiment, not a secondary black-market crypto project. It is an alternative financial infrastructure — systematically designed, state-backed, already operational — and one its creators consider permanent, with or without sanctions.
In less than a year from launch, A7A5 processed one hundred billion dollars in transactions. It is the twentieth-largest stablecoin in the world by market capitalisation.
The Creation — What Comes After Garantex
To understand A7A5, you have to start from its actual birth date. Not the official one — February 10, 2025, when it was presented as "the world's first yield-bearing ruble-backed stablecoin" — but the dates that really matter, the ones that emerge from corporate registries.
On December 13, 2024, two entities were registered in Kyrgyzstan on the same day: Old Vector LLC, the formal issuer of A7A5, and TengriCoin, the company behind the exchange Meer. On January 17, 2025, the same pattern: A7-Kyrgyzstan is registered. Same day: the domain a7a5.io is registered.
Why does this pattern matter? Because on March 6, 2025 — three months after those registrations — an international operation seized Garantex, the Russian exchange that had dominated the ruble/USDT conversion market with little concern for sanctions. Garantex's 2025 volume was ten times its 2022 volume. Tether froze $23 million in USDT linked to Garantex. The end.
But according to Global Ledger data, before the seizure, $29 million had already been transferred from Garantex to Grinex — the exchange that would become central to the A7A5 ecosystem — via A7A5 transactions. The replacement infrastructure had been prepared months before authorities acted. Garantex falls. A7A5 is already ready to pick up the pieces.
Old Vector LLC's project director, Leonid Shumakov, stated the objective with unusual frankness: "To create a cryptocurrency in a friendly jurisdiction that is not subject to sanctions."
The Players — Who Is Really Behind A7A5
The formal issuer name is Old Vector LLC, registered in Kyrgyzstan. But looking only at the formal issuer means seeing only the surface.
PSB — Promsvyazbank holds 49% of A7 LLC, the project's operational holding company. PSB is not an ordinary bank: it is an OFAC-sanctioned Russian state bank that finances Russia's defence industry. It is PSB that holds the ruble reserves supposed to back A7A5 at a 1:1 ratio. PSB's CEO, Petr Fradkov, personally briefed Putin on the cross-border settlement system built around A7.
Here one of the project's structural problems emerges. Kreston Bishkek, the audit firm tasked with verifying the reserves, found that PSB is simultaneously a co-founder of A7 LLC and custodian of the very reserves it is supposed to certify. A conflict of interest so obvious it had to be stated explicitly in the audit report: the auditor was unable to verify the independence of the reserves from the co-founder. In plain terms: the entity verifying the reserves has a direct interest in those reserves existing.
The other 51% of A7 LLC belongs to Ilan Shor. The name means little to European readers, but it deserves attention. Shor is a Moldovan-Israeli oligarch convicted in Moldova for a billion-dollar bank fraud between 2012 and 2014 — a scheme that, according to Kroll's analysis, employed 77 shell companies. In 2019, while his appeal was still open, he fled to Israel. He subsequently obtained Russian citizenship.
He did not stop at bank fraud. Shor orchestrated electoral interference operations in Moldova: according to Moldovan authorities, approximately $39 million was distributed directly to Moldovan voters, with a total estimated spend of $217 million linked to Russian influence on the Moldovan vote. In 2025, the UK sanctioned "Evrasia," his cover NGO. One of his Moldovan associates, Nesterovschi, was sentenced to twelve years in prison.
This is the majority owner of A7 LLC — the central infrastructure of A7A5.
The Mechanism — How A7A5 Works
Technically, A7A5 is a stablecoin issued 99% on the Tron blockchain, with a small portion on Ethereum. Each token is theoretically backed by rubles deposited in a PSB account, at a declared 1:1 ratio.
But the feature that caught the attention of blockchain analysts is not the ruble peg mechanism. It is a function in the smart contract called destroyBlackFunds.
The function works like this: if a wallet is included on OFAC sanction lists or equivalents, A7A5 tokens in that wallet can be "burned" — destroyed — and an equivalent amount can be re-minted ("created from nothing") in a clean wallet. The traceable connection to sanctions is thus broken on the blockchain.
This is not hypothetical. A wallet identified as TNpJj saw 33.8 billion A7A5 tokens — equivalent to approximately $405 million — burned and re-minted this way. That wallet then processed $6.1 billion in transactions.
The business model revolves around a simple mechanism: rubles enter (deposited at PSB), exit as A7A5, A7A5 is sold on Grinex for USDT, and with USDT one can move freely through the global financial system. According to Elliptic, A7A5/ruble transactions amount to $11.2 billion; A7A5/USDT transactions to $6.1 billion. A7A5's internal DEX was injecting up to $150 million in USDT liquidity per day in July 2025.
A revealing operational detail: according to CoinCentral, the DEX operates on a precise schedule — from 10:00 to 12:00, Moscow time, Monday through Friday. This is not a decentralised system. It is an operation run by people with working hours.
To complete the ecosystem, A7 also launched Stablepay — a virtual debit card loaded with A7A5 that allows payment for services like Netflix and ChatGPT — and Digital Promissory Notes: physical banknotes with scratch-off QR codes, redeemable via Telegram bot or at physical "A7 Finance" offices in various countries. Notes worth $8.6 million have been redeemed — 2,300 individual operations.
The Numbers — $100 Billion in 10 Months
The growth trajectory of A7A5 is documented in on-chain data analysed by Elliptic in January 2026.
At launch, in February 2025: 5 billion tokens in circulation, equivalent to approximately $62 million. By May 2025: 12 billion tokens, $149 million. At the July 2025 peak: 42.5 billion tokens, $547 million, with transaction volumes touching $1.5 billion per day.
At that point, 41,300 distinct wallets had interacted with A7A5. This was not a niche phenomenon.
On August 14, 2025, OFAC formally designated as sanctioned entities: A7 LLC, Old Vector LLC, Grinex and Keremet Bank. Six days later, on August 20, the UK government (OFSI) followed with its own sanctions on Grinex, Old Vector, CJSC Tengricoin/Meer.kg and associated individuals: Leonid Shumakov, Kantemir Chalbayev, Zhanyshbek Uulu Nazarbek. In October, sanctions were formalised as part of the European Union's 19th Russia sanctions package. In November, Uniswap added A7A5 to its token blocklist.
Effect of sanctions on volumes: from $1.5 billion per day to approximately $500 million per day — a 67% reduction. USDT liquidity on the DEX collapsed from $150 million per day to $500,000 per week. Not a complete collapse, but a significant retreat.
Yet, at the time of Elliptic's January 2026 analysis: 42.5 billion tokens worth $547 million remained in circulation. Sanctions hit the growth. They did not stop the system.
The Kremlin as Silent Shareholder
One of the most significant aspects of the A7A5 case is the declared participation of the Russian government — not through opaque channels, but at publicly documented events.
In April 2025, Mikhail Kabaloev, Deputy Director of the Russian Ministry of Finance with responsibility for cryptocurrencies, appeared three times in public connection with A7A5. On April 16: at a conference of Russian bankers, he cited A7A5 and noted that "there is even the possibility of a return on investment." On April 23: on stage at Blockchain Life Moscow alongside Shumakov, in a panel titled "Geopolitics of Cryptocurrency: How Russia and the World Shape the Trend in Digital Assets." On April 30: at the Foreign Business Forum (sponsored by A7 and RBC), he described A7A5 as "the first ruble settlement instrument that has already been put into circulation and used one way or another."
The Center for Information Resilience (CIR) commented on these appearances with a direct assessment: "It is unlikely that a Deputy Director of the Ministry of Finance with a specific interest in stablecoins would not have known" about PSB's and Ilan Shor's involvement in the project.
In September 2025, as already noted in the introduction, Putin joined by video call the inauguration ceremony of A7 Finance's branch in Vladivostok. This was not an accidental appearance at a side event: it was the official celebration of the geographic expansion of a system specifically designed to circumvent the sanctions the West had imposed on Russia.
The Offshore Network — 50 Domains and an Israeli Address
The corporate structure of A7A5 mirrors that of major opaque finance schemes: multiple layers, "friendly" jurisdictions, recurring addresses linking formally separate entities.
Favnir Trade LLC FZ is a company registered on October 8, 2024 at The Meydan Hotel in Dubai. The domain is registered with an Israeli phone number, an anonymous Tutanota email, and an address at Oren Street, Caesarea, Israel — which security researchers have identified as an address associated with Ilan Shor, who fled to Israel in 2019. Favnir's stated focus: UAE, China, Turkey — exactly the target markets of A7's expansion strategy.
Alistera Ltd (Seychelles, registration number 235530) shares a mail server — a7-agent.ru — with the main A7-Agent website. The same IT company, Grand Project, installed HR software on both Alistera and A7-Agent on the same day (October 13, 2024), with the same declared number of employees: five.
But the most revealing detail is a network of fifty domains registered between March and May 2025. All share the same mail server — muzpan.com or sodkamus.com. "Sod kamus" is a Hebrew phrase meaning "well-hidden secret." Muzpan presents itself as "Muzpan Secure Communication," an encrypted VoIP/SMS service with Jitsi Meet servers. All domains are registered with the same Israeli address: Oren Street, Caesarea.
The domain names evoke a globally distributed commercial infrastructure: trading companies (tckrglobaltrading.com, baatyr-trade.com), tech (asymmetrictec.com), with explicit focus on Kyrgyzstan, China and the Middle East (bishkekglobalexports.com, krgztrbahrain.com).
The CIR summarised the picture directly: "Shor has a documented history of using large numbers of shell companies in laundering schemes dating back more than a decade."
The Sanctions — Everything That Hasn't Worked (Yet)
There is a tendency, in sanctions analysis, to treat an OFAC designation as the end of the story. The A7A5 case demonstrates it is more complicated than that.
The August 2025 sanctions genuinely hit the project: volumes dropped 67%, USDT liquidity on the DEX collapsed, several mainstream exchanges froze user accounts when on-chain tracking revealed prior transactions with A7A5. The impact was not symbolic.
But $547 million in tokens remain in circulation. The system continues to operate. Grinex, sanctioned, has been replaced by alternative entities in the liquidity network. The destroyBlackFunds function remains available.
Tom Robinson of Elliptic offered perhaps the most clear-eyed assessment: "While the US dollar dominates the global economy, there are structural limits to how far a stablecoin such as this can grow. However, if that changes, all bets are off."
This is a technical observation that contains a geopolitical prophecy. Western sanctioning capacity depends on the dollar's centrality in the global financial system. If that centrality were to diminish — for any reason — the power of sanctions would diminish with it.
The Paradox — Built for Russia, Banned in Russia
There is an irony in the A7A5 story that deserves emphasis. This stablecoin, presented as the Russian response to Western sanctions, as Russia's settlement instrument with the world, cannot be used inside Russia itself.
Russia's domestic regulations on digital assets in payments are not yet aligned to permit stablecoins as daily payment instruments in the country. A7A5 is designed for Russian international trade — to pay foreign suppliers, to circumvent the financial isolation imposed by sanctions — not for ordinary Russians wanting to buy groceries.
There is a proposal under discussion in the Duma to establish a retail cap of 300,000 rubles (approximately $4,000) for non-qualified investors. But Oleg Ogienko commented on the current draft with concern: it risks "creating a commercially non-competitive market."
Russia's anti-sanctions stablecoin is, for now, a tool of the Russian commercial elite operating at the international level. Not a financial alternative for the general population.
The GENIUS Act — The Ban That Arrives Late
On July 18, 2025, President Trump signed the GENIUS Act (Pub.L. 119-27), the first US federal stablecoin law. The law prohibits the issuance of payment stablecoins in the United States by any entity that is not a "permitted issuer" — an authorised and regulated issuer. It prohibits digital asset service providers from offering stablecoins issued by non-compliant entities to American users. Penalties for violations: $100,000 per day in civil fines, $1 million per individual violation, five years imprisonment.
Old Vector LLC has been on OFAC's SDN (Specially Designated Nationals) list since August 2025. It has no possibility whatsoever of becoming a "permitted issuer" under the GENIUS Act.
But there is a subtler implication. Every purchase of A7A5 requires depositing rubles in a PSB account — the OFAC-sanctioned entity that holds the reserves. Every transaction that begins with that purchase is, technically, a transaction with an entity on the SDN list. For US citizens, this creates significant legal exposure, regardless of where the transaction physically takes place.
Plan B — "Survive Even Without Sanctions"
Ogienko's statement in Hong Kong was not an off-the-cuff remark. It is the declared strategy.
The argument runs like this: even if sanctions were removed tomorrow, A7A5 would remain competitive because it offers faster and cheaper settlement than traditional banking systems for anyone wanting to trade with Russia. And then there is the more ambitious vision: "The idea is that we can make an exchange rail between your stablecoin and ours. Not using USDT, USDC, U.S. dollars. We just make direct swaps."
A settlement infrastructure parallel to the dollar-centric system, not as an emergency alternative but as a structural alternative. The timing is not coincidental: the potential closure of the Strait of Hormuz during the US-Iran conflict drove demand for Russian oil. Russia is the third-largest global oil producer, with 11% of world production. South Korea, the Philippines, Indonesia are looking at Russian oil as an energy "lifeline." Every country that trades with Russia needs a settlement mechanism that does not depend on the dollar-centric system.
Juniper Research estimates that B2B stablecoin payments will reach $13.4 billion in 2026 and $5 trillion by 2035. Chainalysis documents a 700% increase in sanctions evasion via crypto in 2025.
One final detail, apparently minor, that measures the project's mainstream penetration: in October 2025, A7A5 appeared as an official sponsor of the Token2049 conference in Singapore, one of the most important events in the global crypto industry. It was removed after media attention. Singapore's authorities confirmed that "the conference promoter was not covered by Russian sanctions." Not Bitget, not an unknown startup: A7A5, sanctioned by US/UK/EU, bought advertising space at a mainstream conference and succeeded, at least temporarily.
Conclusion
In 2022, when the West imposed unprecedented sanctions on Russia following the invasion of Ukraine, the dominant assumption was that the country would have neither the technical capabilities nor the financial channels to build a meaningful alternative system.
In 2025, that system processed one hundred billion dollars. It has a $547 million stablecoin in circulation. It had the Russian president on a video call for a branch opening. It advertised at Token2049 Singapore. And its executives say, out loud and in English, that the project will survive even without sanctions.
The real question is not whether A7A5 will survive the sanctions. It is whether the sanctions will survive A7A5.
Sources: CIR/INFO-RES, A7A5 Report June 2025; Elliptic, "$100 Billion in Transactions: A7A5, the Ruble-Backed Stablecoin" (January 2026); OFAC SDN designation 14/08/2025 (A7 LLC, Old Vector LLC, Grinex, Keremet Bank); CoinDesk, "We Do Not Do Illegal Things: Inside a U.S.-Sanctioned Stablecoin Issuer's Race to Build a Crypto Giant" (16/02/2026); Foreign Policy, "Russia's New Sanctions Evasion Tool" (31/03/2026); CoinDesk, "A Russian Stablecoin Built to Dodge Sanctions Says It Can Survive Even If They're Lifted" (24/05/2026); CoinCentral, "Russian A7A5 Stablecoin Processes $6 Billion After U.S. Sanctions Hit Operators" (October 2025); GENIUS Act, Pub.L. 119-27, signed 18/07/2025; UK OFSI sanctions designation 20/08/2025; EU 19th Russia sanctions package, October 2025