Russia Moves Sanctioned Trade to Crypto
Russia is increasingly using cryptocurrency as a central tool to bypass Western sanctions and sustain its shadow economy. As Bohdan Popov explains in his article “Sanctions vs. Russia’s Shadow Schemes in the Middle East” (08.25.2025), the Kremlin has built a complex crypto-logistics network to replace parts of its disrupted oil and gas monopoly.
After partial destruction of Russia’s oil and gas monopolies in 2022–2024, Moscow heavily invested in creating an alternative financial ecosystem centered on exchanges, mining pools, P2P wallets, and proxy wallets in friendly or neutral jurisdictions.
By 2023, up to 82% of all transactions of Russian sanctioned companies passed through crypto exchanges such as Garantex. Following partial U.S. blocking of Garantex in 2022–2023, Russia redirected operations to other exchanges in Iran, the UAE, and Hong Kong.
In 2025, Russia launched A7A5 — its shadow Central Bank Digital Currency (CBDC). Unlike conventional central bank digital currencies, A7A5 was designed not for regulated markets but to bypass sanctions and conceal foreign economic activity. Built on a modified Hyperledger Fabric blockchain with embedded GOST encryption, the system effectively hides transactions from global blockchain explorers.
It includes conversion gateways to the digital ruble, integrates with Russian crypto exchanges, and facilitates contracts with the Global South and certain BRICS countries. Its cryptographic isolation makes A7A5 nearly impossible for Western intelligence to monitor, allowing shadow B2B settlements to flourish.
In the long term, A7A5 could form the core of a closed Russian financial ecosystem, where Moscow sets the rules on its own digital island.
At the same time, targeted sanctions on IT intermediaries and fintech nodes in the Middle East could significantly disrupt Russia’s shadow crypto infrastructure, which underpins its gray exports and payments for dual-use and military goods. By pressuring these digital channels in countries like the UAE, Türkiye, and India, authorities can strike at the core of Russia’s illicit trade networks beyond traditional measures like SWIFT restrictions or oil sanctions.
Read the full analysis by Bohdan Popov on The Gaze: Sanctions vs. Russia’s Shadow Schemes in the Middle East