Update comes after U.S. and U.K. restrictions hit entities linked to the crypto.
Kyrgyz-issued stablecoin A7A5 lost its peg to the Russian ruble after it was targeted with sweeping new sanctions by the U.S. and the U.K.
The team behind the project announced through social media it’s replacing the crypto’s smart contract with a new one to achieve “fair and accurate pricing.”
A7A5 swaps smart contract as stablecoin’s price drops
Ruble-backed A7A5, issued by a Kyrgyzstan-registered company, has briefly lost its peg to Russia’s fiat currency, following the imposing of new sanctions by U.S. and U.K. authorities against entities and persons linked to the stablecoin.
“On the evening of Aug. 21, the rate of the A7A5 stablecoin instantly fell to 99% of its nominal value (1 A7A5 = 1 RUB),” Bits.media noted in a post published the following day.
A partial price recovery was observed later, but the rate remained in the red zone, at around 0.60 rubles per token, the leading Russian crypto news outlet added.
Also on Friday, the @A7A5official Telegram channel announced the termination of the wA7A5 smart contract, explaining its current rate no longer reflects the market value of the digital asset.
The @A7A5official account on X posted the same update, advising users to refrain from transactions with the old contract, to avoid loss of funds, before the new one is launched and listed on Saturday.
The authors of the message promised to exchange holders’ old tokens for new ones, based on the balance snapshot taken at 18:57:59 GMT+3, on Aug. 21, 2025. They also emphasized the new contract will “ensure fair and accurate pricing.”
On the morning of Aug. 23, the stablecoin was trading at around $0.012, according to CoinMarketCap data, or approximately 0.96 rubles at current exchange rates.
Changes come after fresh sanctions from London and Washington
Since its launch in early 2025, the ruble-pegged A7A5 has been the subject of suspicions it’s being used by Russian actors to circumvent Western sanctions imposed over the war in Ukraine.
Created by A7, a Russian company majority-owned by fugitive Moldovan oligarch with Russian passport Ilan Shor, is now issued by the Kyrgyz-registered Old Vector, as a “fully independent” project.
The cryptocurrency has been also linked to the Kyrgyzstan-based crypto exchange Grinex, alleged successor of the Russian coin trading platform Garantex, taken offline in a U.S.-led operation in March.
Soon after Garantex was shut down, Grinex started processing A7A5 withdrawals. According to an article in the Financial Times, the stablecoin was used to move over $9 billion in four months.
On-chain analytics firm Elliptic claims more than $1 billion is being transferred daily through the stablecoin. Blockchain intelligence company TRM Labs concluded in a report:
“Kyrgyz-registered exchanges have repeatedly facilitated transactions linked to sanctioned Russian entities.”
In mid-August, the U.S. Office of Foreign Assets Control (OFAC) imposed sanctions on multiple Russian companies and individuals linked to the ruble-pegged crypto. Among them were A7, and its subsidiaries, as well as Old Vector.
Russian businessman Sergey Mendeleev, a co-founder of Garantex, and other crypto platforms connected to him were also sanctioned. The Departments of State and the Treasury put $6 million bounties on the heads of Garantex executives.
Later this month, the United Kingdom sanctioned Old Vector, too, in a move to disrupt “dodgy crypto networks” that London believes are being used by Moscow to finance its war effort in Ukraine.
Two of Kyrgyzstan’s traditional financial institutions, Capital Bank and Keremet Bank, were also among the targeted organizations, along with affiliated entities and officials.
This prompted the Central Asian nation’s president, Sadyr Zhaparov, to appeal to U.S. President Donald Trump and U.K. Prime Minister Keir Starmer this week, urging them to avoid “politicizing economy.”
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