There are currently $156 million worth of ruble-pegged A7A5 stablecoins in circulation, held mainly by a small group of users.
When the success of Circle’s public listing made headlines on Wall Street, a lesser-known ruble-pegged stablecoin — launched by a fugitive Moldovan oligarch and a Russian defence-sector bank — was being used for real-world cross-border payments to bypass sanctions on Russia. A7A5, said to be the first ruble-pegged stablecoin, has moved around $9.3 billion on a dedicated crypto exchange in just four months since its launch, according to a Financial Times report.
There are now 12 billion A7A5 tokens in circulation, worth around $156 million. However, only a “relatively small group of users” actively use the token.
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The stablecoin was officially launched in Kyrgyzstan to support large-scale financial flows in and out of Russia. Interestingly, only a newly launched Kyrgyzstan-based crypto exchange, Grinex, handled the vast volume of A7A5 transactions.
Grinex, which supports trading only in A7A5, rubles, and a dollar-pegged stablecoin, was founded around the same time as the ruble-pegged token. The exchange and the stablecoin issuer were registered in Kyrgyzstan shortly after the US crackdown on Garantex, Russia’s largest crypto exchange.
Furthermore, Swiss blockchain research company Global Ledger found that a large amount of USDT held on Garantex was moved into A7A5. Then, around $29 million worth of A7A5 tokens were transferred to Grinex.
Over the months, at least $149 million has been invested in the ruble-pegged cryptocurrency, which is expected to generate tens of millions of dollars’ worth of rubles in interest for its creators.
The stablecoin had a British-sanctioned firm, A7, as its backer. A7A5 told the publication that it had “co-operated with the technical team of A7 at the early stage” but “decided to separate completely due to different visions of development strategy” last month.
Notably, the rise in the token’s use came at a time when multiple Russian officials promoted cryptocurrencies as a way to bypass Western sanctions. The country’s Finance Minister even confirmed the use of Bitcoin in international trade settlements.
Russian users can first buy A7A5 tokens on Tron or Ethereum, swap them for Tether’s USDT (which tracks the US dollar), and then withdraw the funds in any country and currency they choose.
The Garantex seizure by US authorities and the subsequent freeze of $23 million in USDT by Tether from Garantex wallets led to growing demand for a local stablecoin in Russia.
“Garantex users with outstanding balances at the time it was shut down could have these balances credited to new accounts set up on Grinex,” said Tom Robinson, chief scientist and founder of Elliptic. “It is therefore clear that Grinex is a direct successor to Garantex, and highly likely to be operated and controlled by the same parties.”
However, Grinex claims to be an independent platform and denies any connection to Garantex.
“All claims of ‘continuity’ or ‘rebranding’ are speculative and not supported by the facts,” a Grinex representative told the Financial Times. “Grinex capitalised on market opportunities after the closure of Garantex as part of its growth strategy… Grinex obtained a portion of the non-toxic customer base of the blocked Garantex exchange, committing only to users with a transparent history.”
