Vladimir Putin rarely lends his name to the opening of a regional bank branch, yet in September he appeared virtually at the launch of a new A7 payments network office in Vladivostok.
A7 is no conventional bank: it is a crypto-linked payments platform jointly owned by sanctioned Moldovan oligarch Ilan Shor and Russia’s sanctioned defence bank Promsvyazbank (PSB).
Putin’s involvement was striking given Moscow’s long-standing suspicion of cryptocurrencies. As recently as early 2022, Russia’s central bank had called for an outright ban on crypto, warning it threatened financial stability and likening it to a pyramid scheme. That stance, reportedly encouraged by the FSB, has since shifted dramatically.
Western sanctions imposed after Russia’s invasion of Ukraine severely disrupted the country’s access to global finance. While much trade remains legal, foreign banks risk penalties for dealing with Russian institutions, and tougher US secondary sanctions have further restricted payments. Crypto, operating largely outside regulated banking systems, has emerged as a workaround.
Putin has openly embraced the shift, calling digital currencies “a very dynamic and promising direction” and warning Russia must not “miss the moment”. Analysts say crypto has become central to keeping Russian trade flowing. According to Shor, A7 has facilitated 7.5 trillion roubles (£71bn) in international settlements in less than a year, though the precise scale is disputed.
In January, A7 launched A7A5, a rouble-backed stablecoin supported by reserves held at PSB. Since then, more than $87bn of transactions have passed through the token, according to blockchain analysts, with activity suggesting it is primarily used by businesses rather than consumers. The token functions mainly as an on-ramp, converting roubles into crypto that can then be swapped for dollar-backed stablecoins such as Tether for cross-border payments.
While the volumes converted into mainstream stablecoins are far smaller than the headline figures, crypto has nonetheless become a key channel for purchasing electronics and components—often via intermediaries in China—used in Russia’s military-industrial supply chains.
Western authorities have sanctioned A7, related exchanges and the A7A5 token, but the impact has been limited. Trading volumes dipped briefly after EU measures were announced, before rebounding. Analysts argue that while crypto cannot fully replace traditional finance—particularly for large-scale oil and gas trade—it has become an indispensable tool for Russia to spend the revenues it still earns under sanctions.
