The EU accused it of helping Moscow evade Western restrictions. The move also follows similar actions by the US and UK and comes as A7A5’s market cap skyrocketed to around $500 million. At the same time, the EU’s markets regulator, ESMA, is pushing to centralize crypto oversight under the new MiCA framework. It plans to transfer power from national regulators to a single EU authority. The main goal of the plan is to create a more unified and competitive financial system, but it faces resistance from member states over MiCA’s passporting rules and the balance between national autonomy and EU-wide regulation. A7A5 Faces EU Scrutiny The European Union is reportedly preparing to impose sanctions on A7A5, a Russian ruble-backed stablecoin that became the world’s largest non-US-dollar pegged digital asset. According to Bloomberg, the proposed sanctions would ban EU-based individuals and entities from directly or indirectly engaging with the token. This will be another step in the bloc’s efforts to clamp down on crypto avenues allegedly used by Russia to evade Western restrictions. The proposal also targets several banks across Russia, Belarus, and Central Asia which are accused of facilitating crypto-related transactions for sanctioned entities. This move follows a number of recent measures by the EU, including sanctions announced on Sept. 19 that blocked all crypto transactions involving Russian residents and prohibited dealings with foreign banks connected to the country’s financial sector. Not long after the EU’s latest sanctions on crypto platforms were unveiled, A7A5’s market cap surged from around $140 million to over $491 million in a single day, which was a 250% jump. The token’s market cap has since stabilized close to $500 million—making up roughly 43% of the total $1.2 billion capitalization of non-dollar stablecoins. In comparison, Circle’s euro-pegged EURC holds a market cap of about $255 million. A7A5’s market cap (Source: CoinMarketCap ) EU sanctions require unanimous approval from all 27 member states before implementation, leaving room for some revisions. The European Council describes these measures as tools to influence the behavior of targeted actors in line with the EU’s Common Foreign and Security Policy. The EU’s move is also very similar to earlier actions by the US and the UK, which sanctioned financial networks allegedly helping Russia skirt restrictions. Those sanctions included Kyrgyzstan-based exchanges Grinex and Meer, as well as infrastructure linked to A7A5. A7A5 was launched in February on the Ethereum and Tron blockchains by Moldovan banker Ilan Shor and Russia’s state-owned Promsvyazbank, and claims to be backed by fiat deposits in Kyrgyzstan’s banking system. Despite facing bans and growing scrutiny, the company behind A7A5 made an appearance at the Token2049 event before being removed by organizers. EU Eyes Central Crypto Regulator Meanwhile, the EU’s markets regulator, the European Securities and Markets Authority (ESMA), wants to gain expanded authority over crypto exchanges and related operators to unify oversight under the bloc’s new Markets in Crypto-Assets (MiCA) framework. ESMA chair Verena Ross told the Financial Times that the European Commission is developing plans to transfer supervision of several financial sectors, including crypto, from national regulators to ESMA. She said the move will strengthen Europe’s financial integration and global competitiveness by addressing the ongoing fragmentation in the single market. Currently, under MiCA, crypto-asset service providers are licensed by national authorities rather than a central EU body. Smaller member states have been at the forefront of the rollout, with Lithuania granting a MiCA license to Robinhood Europe, and Malta approving major exchanges like OKX and Crypto.com. Luxembourg also authorized Bitstamp and Coinbase. However, Ross argued that this decentralized approach led to certain inefficiencies, as each member state has to develop its own regulatory expertise and systems. ESMA previously raised concerns about inconsistent licensing standards, and pointed out issues in a July report that criticized parts of Malta’s process. ESMA was created in 2011 after the global financial crisis, and its original mission was to harmonize financial regulation across the EU. The expansion of its powers to include direct oversight of crypto firms is a massive step toward centralizing authority under MiCA, which came into force in mid-2024 to establish a unified framework for digital asset issuers and service providers. However, there are still tensions over MiCA’s “passporting” rule, which allows companies licensed in one EU country to operate across all 27 member states without seeking separate approvals.People in the industry warned that the system’s uneven implementation threatens to undermine regulatory consistency. Some countries, like France, are reportedly considering limits on passporting rights for crypto companies licensed elsewhere in the bloc, which critics argue could violate the EU’s single-market principles. Marina Markezic of the European Crypto Initiative said the challenge lies in having multiple national regulators oversee the same law, which risks fragmenting the system MiCA was designed to unify.
