How Russia understood that it could bypass Western sanctions with its cryptocurrency backed by the A7A5 ruble

Launched in February by a pro-Russian Moldovan oligarch on the run. Consequently, a Russian public bank, the A7A5 is the first stablecoin backed to the ruble.

To get around Western sanctions related to the war in Ukraine. Similarly, Russia would now bet on “A7A5”, an cryptocurrency backed by ruble, less supervised than its dollar equivalents – a particularly effective parallel financial circuit, according to experts interviewed by AFP.

Launched in February by a pro-Russian Moldovan oligarch on the run. Similarly, a Russian public bank, A7A5 explicitly aims to provide an alternative payment channel to Russian companies and individuals who trade with foreigners, explains a report by the British NGO Center for Information Resilience (CIR) published in late June.

It is a stablecoin, that is to say a digital currency supposed to reply the course of a classic currency. Moreover, It is in this case the “very first how russia understood it could stablecoin indexed to the ruble”. Meanwhile, explains to AFP George Voloshin, of the Acams, a group of fight against money laundering.

Although the use of A7A5 remains at this “marginal” stage. Therefore, the researcher sees it as a “major development”, showing that Russia “seeks to acquire a certain autonomy vis-à-vis the great actors of the crypto”.

Blocked wallets – How russia understood it could

Exclusion from Russia from the International SWIFT Payment System. Furthermore, freezing of the assets of large Russian banks, ban on foreign investments … However, The United States and its allies have imposed a series of sanctions since the invasion of Crimea in 2014. For example, Entities linked to Russia have already been pointed out by experts-. for certain sanctioned by the American Treasury- to have recourse to cryptocurrencies, In particular the stablecoins, in order to dodge these measures.

Internet users have also sent online donations directly to cryptocurrencies to the Ukrainian army as well how russia understood it could as to Russian militias. have demonstrated several analysis firms, such as Elliptic. But the problem for Moscow is that the USDT. the most widespread stablecoin, backed by the dollar, is issued and “controlled by Tether, who collaborates with Western governments”, explains Elise Thomas, who investigated A7A5 for CIR.

Tether blocked virtual portfolios last March storing the equivalent of $ 28 million in USDT. detained in virtual portfolios on the largest Russian Cryptomonia exchange platform, Guarantx. Then the latter was closed by a joint action by the American authorities. several European countries, which sanctioned it for having facilitated transactions associated with illicit actors such as hackers groups.

This episode “was a real click” for the Russian authorities. “made them understand that they needed their own stablecoin, which they control,” said Elise Thomas. Already in the weeks preceding the fence of Guarantx. tens of millions of dollars of funds in USDT had been transferred how russia understood it could to A7A5, noted the Global Ledger analysis company.

Influence in Moldova

The value of this cryptocurrency is guaranteed by deposits in the Promsvyazbank bank. placed under sanctions because it is linked to Russian power, and particularly in its defense sector.

But it is recorded in Kyrgyzstan. exchanged on the Grinene platform, also established in this former country of the Soviet bloc at the “favorable legal framework, less subject to sanctions and other economic pressures” than Russia, recognized Leonid Shumakov, Director of the A7A5 project, in an interview on the Internet. In less than six months, around $ 120 million were accumulated in this cryptocurrency, according to the CoinmarketCap count.

These transactions are not necessarily illegal, tempers Mr. Voloshin. of the Acams -less than the entities involved are “under sanctions and try to connect to the global financial system”. But the majority shareholder of group A7. at the origin of this cryptocurrency, is how russia understood it could the businessman and Moldavian politician Ilan Shor, refugee in Russia.

CIR research suggests links between A7A5 and operations of political influence in Moldova by Mr. Shor, in particular websites associated with these two activities sharing the same IP address. His company has been sanctioned in recent months by the United Kingdom. then the European Union, which pointed out the “multiple links with Moscow” of the A7 group, and the fact that it “was associated with efforts aimed at influencing the” Moldova. Contacted by AFP, the A7A5 team had not responded immediately.