TLDR
- EU sanctions target A7A5 stablecoin, blocking Russian crypto channels.
- A7A5 flow to Europe accounts for only 2.37% of Bitcoin trading volume.
- Grinex and A7A5 are major routes for converting rubles into cryptocurrency.
- EU sanctions increase compliance costs but may not disrupt crypto liquidity.
The European Union is looking to block A7A5, a ruble-backed stablecoin used to route transactions into European crypto markets. This move aims to cut off one of the major channels that facilitate sanctions evasion. But with ruble-backed flows accounting for a small share of Bitcoin trading in the EU, the sanctions might not disrupt European crypto markets as much as expected.
EU Targets A7A5 Stablecoin
The EU has proposed sanctions on the A7A5 stablecoin, which is linked to Russia’s Promsvyazbank (PSB). A7A5 is a ruble-backed token, primarily used to facilitate the conversion of rubles into cryptocurrency. The stablecoin routes through Kyrgyzstan before being traded on platforms like Grinex, where it is exchanged for other stablecoins like USDT. The European Union plans to restrict its use, banning EU-based entities from engaging in transactions involving A7A5.
The stablecoin is issued by A7, a payments firm tied to Moldovan banker Ilan Shor and PSB, a Russian state-owned bank. This move follows previous sanctions on Garantex, a Russia-based crypto exchange that helped create A7A5, and A7 itself, which was sanctioned in early 2025. Despite these actions, A7 has continued operations, with new ways to settle transactions across borders.
Flow of Ruble-Backed Tokens to Europe
The A7A5 stablecoin has become the dominant channel for converting rubles into crypto. Most of this conversion happens through exchanges like Grinex, which are based in Kyrgyzstan. Users convert rubles into A7A5 tokens, then exchange them for USDT, another stablecoin pegged to the US dollar. The tokens are primarily issued on the Ethereum and Tron networks.
Data shows that A7A5 is involved in transactions worth billions of dollars. By September 2025, over 41 billion A7A5 tokens were circulating, with the cumulative transaction value reaching around $68 billion. Although this activity is significant, the amount routed to Europe represents a small fraction of the EU’s total Bitcoin trading volume.
Limited Impact on European Bitcoin Liquidity
While the sanctions will affect the flow of ruble-backed stablecoins into Europe, the impact on Bitcoin liquidity is expected to be minimal. According to reports, the ruble-linked stablecoin flow to Europe amounts to just 2.37% of total Bitcoin trading volume in the EU for the first half of 2025. This figure suggests that the proposed sanctions will target a niche part of the market rather than disrupt the core of Europe’s Bitcoin liquidity.
The Bitcoin market in Europe is heavily dominated by BTC/EUR trading pairs. Major European exchanges, such as those in Poland and the Czech Republic, list local currency pairs, but BTC/EUR remains the most active. Even with A7A5 flows contributing to the EU market, they make up only a small portion of total transactions.
Enforcement Challenges and Future Outlook
The EU sanctions on A7A5 may increase compliance efforts for Virtual Asset Service Providers (VASPs) based in Europe. These firms will be required to ensure that they do not engage with entities or tokens that are subject to EU sanctions. However, the sanctions are unlikely to cause immediate disruptions to the broader Bitcoin market, given the relatively low exposure of ruble-backed stablecoins.
The challenge for European authorities is that sanctioned actors may quickly find alternative channels. Similar efforts to disrupt Russian-linked crypto services, such as Garantex in March 2025, led to the immediate creation of new platforms like Grinex. Unless the enforcement targets the underlying demand for cross-border capital movement, new routes for sanctions evasion may quickly emerge, rendering the sanctions less effective.
The EU sanctions mark a coordinated effort alongside actions by the US and the UK to crack down on crypto-related sanctions evasion. However, the effectiveness of these measures will depend on the ability to address the underlying infrastructure that facilitates these transactions.
