EU Considers Sanctions on Ruble-Backed Stablecoin A7A5: Insights
The European Union is discussing potential sanctions against the A7A5 stablecoin, which is supported by the ruble, as efforts intensify to control crypto transactions associated with Russia.
The European Union is reportedly in discussions to impose sanctions against A7A5, a stablecoin backed by the Russian ruble, currently the largest non-US dollar pegged stablecoin.
These sanctions would prohibit organizations and individuals within the EU from conducting any transactions with the token, whether directly or through intermediaries, according to a report from Bloomberg citing proposal documents.
Additionally, various banks located in Russia, Belarus, and Central Asia are also under scrutiny, allegedly for facilitating crypto transactions for sanctioned entities.
This move is part of the EU’s ongoing strategy to disrupt Russian-affiliated crypto activity, which follows previous sanctions on September 19 that restricted all transactions from Russian citizens and limited operations with foreign banks linked to this sector.
Cryptocurrency has become one of the several tactics employed by Russia to evade Western sanctions.
A7A5’s market capitalization surged significantly following the EU’s initial sanctions against crypto platforms, growing from $140 million to over $491 million just a week later, reflecting a 250% increase in one single day.
As of this Monday, A7A5 has stabilized around $500 million in market cap, representing roughly 43% of the total market cap for all non-US dollar stablecoins.
The European Council states that sanctions are intended to target those accountable for certain policies or actions that the EU aims to influence. In addition to this, the sanctions follow similar restrictions imposed by the United Kingdom and the US, which also targeted parts of the financial sector believed to be used by Russia to circumvent Western sanctions.
The A7A5 stablecoin was launched in February on both the Ethereum and Tron networks by Moldovan banker Ilan Shor and Promsvyazbank, a state-owned Russian financial institution. Despite recent sanctions and being banned in Singapore, the A7A5 team participated in the Token2049 event, although they were eventually removed and their presence disallowed.
