Something interesting is happening with A7A5, the Russian ruble-stablecoin. Oleg Ogienko, the man behind the project, is being quite cautious in how he communicates what they’re doing, but the story behind it is actually pretty wild.

So, the company says they are fully compliant with Kirgizische regelgeving and everything required by the Financial Action Task Force. KYC, AML, audits—it’s all built in. Fair enough. But here’s the twist: their parent companies and the bank managing their reserves are sanctioned by the U.S. So they can’t really operate in dollars in the normal way. That doesn’t make it illegal in Kirgizië or Russia, but it does create an interesting gray zone.

What really surprised me: this stablecoin grew faster last year than USDT or USDC. We’re talking about nearly $90 billion in new supply, while Tether added about $49 billion and Circle around $31 billion. That’s pretty aggressive growth.

The demand mainly comes from companies in Asia, Africa, and South America that trade with Russian exporters and importers and need cross-border payments. Centralized exchanges don’t want to mention it due to secondary sanctions risks, so liquidity is actually pretty limited. About $50k USDT available in the DeFi pools, which isn’t much.

Gienko was at Consensus in Hong Kong and said that they are negotiating with various blockchains and exchanges to arrange more liquidity. They are already on Tron and Ethereum, and they’re looking at more. An interesting detail: A7A5 was also a sponsor at Token2049 in Singapore, which caused some commotion because other sponsors got worried. The BOB Group, which organizes Token2049, later removed references to A7A5.

The ambition is pretty big: they hope to settle more than 20% of Russian trade via A7A5. But there’s still a problem: in Russia itself, they can’t use it yet because regulators there are still thinking about stablecoin regulation.

Gienko emphasizes that they’re businesspeople, not politicians, and they’re open to cooperation with any country. Whether that will practically work under the current sanctions regime—that remains the big question.