The European Union is preparing to impose sanctions on A7A5, a stablecoin backed by the Russian ruble, citing its use in helping sanctioned entities evade financial restrictions.
Key Takeaways
- A7A5, the world’s largest non-dollar-pegged stablecoin, may be banned by the EU due to links with Russian state-backed entities.
- The proposed sanctions will ban all EU-based transactions with A7A5, directly or indirectly, to prevent sanctions evasion.
- Several banks in Russia, Belarus, and Central Asia are also under scrutiny for facilitating crypto-related transfers.
- A7A5’s market cap spiked 250 percent shortly after EU sanctions on Russian crypto platforms in September 2025.
What Happened?
The EU is preparing a new wave of sanctions that includes banning the ruble-backed stablecoin A7A5. According to documents seen by Bloomberg, the token has been identified as a tool used by Russia to bypass existing sanctions and potentially finance its military operations. This move marks an aggressive step in Europe’s efforts to close gaps in crypto regulation and enhance sanctions enforcement.
🇪🇺 EU has proposed imposing sanctions on A7A5, a ruble-backed stablecoin tied to sanctioned Russian actors, – Bloomberg
— Beefeater (@Beefeater_Fella) October 6, 2025
The sanctions will prohibit any engagement by EU-based entities in transactions involving the token and target several banks for enabling crypto-related… pic.twitter.com/lDmRpN522f
EU Targets A7A5 to Curb Crypto Sanctions Evasion
A7A5, launched in February 2025, is pegged one to one to the Russian ruble and has rapidly become a focal point of international regulatory concern. Developed by A7, a cross-border payments company owned by Moldovan fugitive Ilan Shor and Russia’s Promsvyazbank (PSB), the token is accused of enabling discreet financial transactions by Russian entities under sanctions.
EU officials believe A7A5 is being used to circumvent international restrictions, especially following the crypto-related sanctions imposed in September 2025 that blocked Russian residents from most digital platforms. The new measures would prohibit all EU citizens and businesses from engaging with A7A5, either directly or through intermediaries.
The proposal also targets a number of financial institutions in Russia, Belarus, and Central Asia that are suspected of processing transactions linked to A7A5. These include crypto exchanges in Kyrgyzstan and others associated with the coin’s infrastructure.
A7A5 Market Cap Surge Raises Red Flags
The crackdown follows a significant rise in A7A5’s use. On September 26, just one week after EU sanctions hit Russian crypto platforms, A7A5’s market capitalization jumped from $140 million to over $491 million in a single day, according to CoinMarketCap. As of early October, it remains steady at around $500 million, accounting for nearly half of the entire market cap of non-USD-pegged stablecoins.
This dramatic growth has sparked concerns that A7A5 is now being used as a financial workaround for sanctioned Russian entities. The EU’s action aims to limit its liquidity, disrupt its credibility, and discourage any further market participation by European firms.
Sanctions Align With US and UK Measures
The EU’s proposed restrictions follow earlier steps taken by the United States and the United Kingdom in August 2025. Both countries sanctioned entities tied to A7A5, including Capital Bank of Central Asia, exchanges like Grinex and Meer, and A7’s leadership.
Despite the growing scrutiny, A7 continued its promotional activities. The firm appeared at the Token2049 conference in Singapore, even after Singapore itself banned the token. A7 executive Oleg Ogienko also took the stage to speak, raising further alarms about the token’s global reach.
EU Policy Pushes Toward Stricter Crypto Regulation
To implement the sanctions, the EU proposal must receive unanimous backing from all 27 member states. If passed, the measures will mark a significant tightening of crypto-related rules and signal the EU’s intent to lead global standards in regulating digital finance.
European officials emphasize that digital assets should not be tools to bypass foreign policy objectives. They assert that closing loopholes is necessary to uphold sanctions integrity and deter misuse by rogue states.
CoinLaw’s Takeaway
In my experience watching crypto regulation evolve, this is one of the strongest moves by the EU to reinforce its stance on crypto misuse. A7A5’s rapid rise made it impossible to ignore, and its backers raised too many red flags to go unchecked. I found the EU’s coordination with US and UK efforts especially telling. It shows that Western regulators are finally working together to tighten the screws on bad actors in the digital asset space. This won’t just hurt A7A5’s liquidity, it sends a loud message to others trying to sidestep global sanctions using crypto.
