EU Drafts New Sanctions On Russia’s Cross-Border Crypto Payments System

The European Union is preparing to impose sanctions on A7A5, a ruble-backed stablecoin that has become a key tool for Russia’s cross-border payments amid Western restrictions.

The Gaze reports this, referring to Bloomberg, citing internal EU documents. 

Under the proposed plan, EU entities and individuals would be banned from engaging in any direct or indirect transactions involving the token. 

The package would also target several banks in Russia, Belarus, and Central Asia accused of facilitating crypto transfers linked to sanctioned actors.

While the European Commission declined to comment on draft sanctions before official approval, the measures will require unanimous backing from all 27 member states and could be revised before adoption.

The A7A5 stablecoin was created by A7, a payment company co-owned by fugitive Moldovan financier Ilan Shor and Russia’s state-owned Promsvyazbank, both previously sanctioned by Western governments. 

The company reportedly helped Russian firms conduct international transactions blocked by U.S. restrictions, using the Moscow-based Garantex crypto exchange as an intermediary.

Promsvyazbank and Garantex were sanctioned in 2022 following Russia’s full-scale invasion of Ukraine, while A7 itself was added to the EU’s blacklist earlier this year.

According to blockchain analytics firm Elliptic, as of September 26 there were around 41.6 billion A7A5 tokens in circulation, worth approximately $496 million, with total transaction volumes reaching $68 billion.

Analysts say the token has become an important instrument in Russia’s efforts to bypass international sanctions that allows the Kremlin and affiliated companies to move funds across borders despite restrictions on the traditional banking system.

According to the Financial Times, Russia has likely conducted crypto transactions worth at least $6 billion since August, successfully evading U.S. financial restrictions through such digital networks.

As The Gaze previously reported, EU member states agreed to impose new restrictions on the movement of Russian diplomats within the bloc, in response to a growing wave of sabotage and espionage operations carried out by Russian agents operating under diplomatic cover.