Author: Anita Mornings in Moscow always come late in winter. The subway glided from the gray residential area into the city center. Inside the carriages, advertising screens scrolled through messages about ruble loans, online shopping promotions, and a seemingly normal banner: "For overseas income settlement? USDT is also acceptable." It's hard to imagine that in a country besieged by the Western financial system, the term "stablecoin," which originally only appeared in Silicon Valley white papers, has quietly become an infrastructure that ordinary people and businesses rely on in real life. Alexei (pseudonym), 34, claims to be an "IT consultant," but his true identity is a small node in a stablecoin black market chain in Moscow. At nine o'clock in the morning, his work begins with checking Telegram channels. There are four or five groups on my phone: "Moscow USDT Insider Price", "Settlement Channel for Freelancers", and "Ruble Cash Exchange/Card Transfer - For Acquaintances Only". Each group has a robot offering prices—"Buy USDT 76.3, sell 77.1." Going deeper, there are dozens of private chat windows. There are young people doing outsourced development who need to exchange US dollars sent by clients from their foreign cards into USDT, and then into rubles; there are small companies that import small parts and need to use USDT to pay Turkish suppliers; and there are also unfamiliar numbers with accents that only say one sentence: "Large amount, meet offline." Alexei's profit model is simple: earn a small profit from the price difference on small transactions, or take a few per thousand "handling fees" on large transactions, and then link it to a larger exchange or brokerage firm. All of this may seem like just a simple "currency exchange," but the funds will soon be channeled into deeper, more murky currents. Some people deposit USDT into local exchanges with Russian-language interfaces and then exchange it for Bitcoin and transfer it away. Others use Russian-based platforms like Garantex to launder funds into offshore accounts. Still others use it to supplement liquidity for companies in Georgia and the UAE. In the evening, he would divide the USDT he earned that day into two parts. He would sell one part for rubles to pay his mortgage and buy groceries, and the other part would lie quietly in a multi-signature wallet, waiting for the situation to change again, which might be the last insurance for his family. On the statistics table, he is just a tiny fraction of the "Russian retail investor crypto inflow". But the line connecting all these points is the invisible market. 1. After being severed, new blood vessels grew underground. Russia's crypto saga didn't begin after the sanctions. In 2020, Eastern Europe was already one of the regions with the highest volume of crime-related crypto transactions globally. Chainalysis research shows that the dark web received a record $1.7 billion in cryptocurrency that year, most of which flowed to one name: Hydra. Hydra was by far the world's largest dark web marketplace, at its peak accounting for 75% of the global dark web market's revenue. Before being shut down by German police in April 2022, it was actually a huge “dark economy hub”—drugs, fake documents, money laundering services, biometric data, all “transactions not recognized by the official world” were settled in stablecoins. Hydra's collapse did not make the chain disappear, but merely dispersed its shadow: its users, infrastructure, and intermediary network were later reassembled among Garantex, Telegram OTC, and smaller exchanges. The dark side of Russia's crypto economy did not emerge after the sanctions; it has deep historical roots. Since the outbreak of the Russia-Ukraine war in 2022 and the subsequent escalation of sanctions, Russia has been surrounded in the traditional financial world: its foreign exchange reserves have been frozen, major banks have been excluded from SWIFT, and Visa and Mastercard have collectively withdrawn. For a country whose lifeblood is energy and commodity exports, this is almost tantamount to having its throat twisted. But the numbers on the blockchain tell a different story: According to Chainalysis's statistics on European crypto activity from July 2024 to June 2025, Russia received $376.3 billion worth of crypto assets during this period, ranking first in Europe and far exceeding the UK's $273.2 billion. Russia is no longer an invisible player in Bitcoin mining. The latest estimates from hashrate data platform Hashrate Index show that by the end of 2024, Russia will account for approximately 16% of global Bitcoin hashrate—second only to the United States. These two numbers are cold and hard, but they are enough to illustrate: As the world tries to expel Russia from the traditional financial system, a new, underground crypto economy is rapidly growing. If OTC vendors like Alexei are the capillaries, then local exchanges like Garantex are the heart of the black market. Garantex was originally registered in Estonia, but its business focus has always been in Moscow. Starting in 2022, it was successively added to the sanctions lists of the US Treasury Department and the European Union, accused of facilitating ransomware, dark web transactions, and sanctioned banks. Logically, such a platform should have been defunct long ago. However, in September 2025, a report disclosed by the International Consortium of Investigative Journalists (ICIJ) revealed that despite multiple crackdowns, Garantex was actually "continuing to operate in the shadows," providing cryptocurrency exchange and transfer services to customers in Russia and the surrounding region through a series of offshore companies, mirror sites, and proxy accounts. Even more striking is an in-depth report from on-chain analytics firm TRM Labs, which points out that in 2025, Garantex and the Iranian exchange Nobitex together accounted for more than 85% of the crypto funds flowing into sanctioned entities and jurisdictions. In March 2025, Tether froze USDT wallets worth approximately $280,000 (about 2.5 billion rubles) associated with Garantex, forcing the exchange to suspend operations. However, a few months later, the U.S. Treasury Department sanctioned a new name: Grinex – “a cryptocurrency exchange created by Garantex employees to help it circumvent sanctions.” The black heart was punched, and then it began to beat again in a new form. II. A7A5: The Ambition and Paradox of "Ruble on the Chain" USDT is currently the main player in Russia's shadow economy, but in the eyes of Moscow officials, it also has a fatal problem—it is too "American" and too "centralized". In 2025, a new piece was quietly put on the table: A7A5, a stablecoin issued by a Kyrgyz platform and touted as being "ruble-pegged". A Financial Times investigation revealed that A7A5 completed transactions worth approximately $6-8 billion within four months, mostly on weekdays and concentrated during the Moscow trading session, with the custodian bank being Promsvyazbank, a Russian defense bank under sanctions. The EU and UK sanctions documents bluntly describe it as "a tool for Russia to circumvent sanctions." By October 2025, the EU officially added A7A5 to its sanctions list, and on-chain analytics firms also pointed out that it has a close connection with Garantex and Grinex—becoming a new central node in Russia's crypto clearing network. The role played by A7A5 is quite subtle: 1. For Russian companies, it is a "ruble stablecoin that can bypass the risks of USDT"; 2. For regulators, it is "an invisible tool to put rubles on the blockchain and bypass bank scrutiny." Behind this lies a growing and clear idea in Russia: "Since we cannot do without stablecoins, at least a portion of them should be printed by ourselves." The paradox is that any stablecoin that wants to go global must rely on infrastructure that Russia cannot control: public blockchains, cross-border nodes, overseas exchanges, and third-country financial systems. A7A5 aspires to be a "sovereign stablecoin," yet it is forced to circulate in a world not controlled by Russia. This is a microcosm of Russia's entire crypto strategy—it wants to break free from Western finance, yet it is forced to continue using the "on-chain financial building blocks" constructed by the West. III. What does encryption mean for Russia? Not the future, but the present. The Western world often views encryption as an asset, a technology, or even a culture. But in Russia, it plays a completely different role: 1. For businesses: Encryption is a backup channel for trade settlement. Russia imports high-tech parts, drone components, industrial instruments, and even consumer goods, many of which cannot be paid for through traditional banking systems. This has led to a clandestine but stable route: Russian companies export to the Middle East/Central Asia, where intermediaries distribute the goods to suppliers via USDT/USDC, and then the goods are returned to Moscow for OTC exchange in rubles. It is not sophisticated, romantic, or "decentralized," but it is usable, dynamic, and adaptable. Encryption is not a dream here; it is the least efficient but only dynamic form of realism. 2. For young people, crypto is an escape from their native currency. The Russian banking system has long suffered from a lack of trust, and the ruble's fragility over the years has made cryptocurrencies a natural safe haven for the middle class and young engineers. If you ask any software engineer in Moscow, they might not tell you "I trade cryptocurrency," but rather, "I convert my salary into USDT and put it with a trusted OTC team on Telegram. The bank may freeze my card, but the blockchain won't freeze me." This statement is a microcosm of contemporary Russia. 3. For nations, encryption and mining are "digital energy exports." Russia possesses one of the world's cheapest electricity sources—Siberia's hydroelectric and natural gas surplus power has become a haven for Bitcoin mining. Mining offers: an "export product" that bypasses the banking system, a globally redeemable digital commodity, and a way to circumvent financial blockades. The Russian Ministry of Finance has repeatedly acknowledged that "revenue from mining is an essential component of the country's trade system." This is no longer a grassroots activity, but a quasi-national economic sector. 4. For gray systems: Encryption is an invisible lubricant. This part is difficult to quantify, but the facts include European intelligence agencies pointing to Russian intelligence agencies using encryption for information warfare, hacking operations, large-scale underground funds shuttling between Europe and Russia via stablecoins, and various smuggling networks highly relying on on-chain funds. Is Russia a "crypto superpower"? The answer is more complex than you might imagine. If you measure it by technological innovation, no. If you look at it from the perspective of VC projects and DeFi, then it's not like that either. If you measure it by mining, on-chain transaction volume, stablecoin inflows, and trade settlement reliance, it is a crypto power center that cannot be ignored globally. It did not become "voluntarily," but rather "was pushed into becoming by the world."Author: Anita Mornings in Moscow always come late in winter. The subway glided from the gray residential area into the city center. Inside the carriages, advertising screens scrolled through messages about ruble loans, online shopping promotions, and a seemingly normal banner: "For overseas income settlement? USDT is also acceptable." It's hard to imagine that in a country besieged by the Western financial system, the term "stablecoin," which originally only appeared in Silicon Valley white papers, has quietly become an infrastructure that ordinary people and businesses rely on in real life. Alexei (pseudonym), 34, claims to be an "IT consultant," but his true identity is a small node in a stablecoin black market chain in Moscow. At nine o'clock in the morning, his work begins with checking Telegram channels. There are four or five groups on my phone: "Moscow USDT Insider Price", "Settlement Channel for Freelancers", and "Ruble Cash Exchange/Card Transfer - For Acquaintances Only". Each group has a robot offering prices—"Buy USDT 76.3, sell 77.1." Going deeper, there are dozens of private chat windows. There are young people doing outsourced development who need to exchange US dollars sent by clients from their foreign cards into USDT, and then into rubles; there are small companies that import small parts and need to use USDT to pay Turkish suppliers; and there are also unfamiliar numbers with accents that only say one sentence: "Large amount, meet offline." Alexei's profit model is simple: earn a small profit from the price difference on small transactions, or take a few per thousand "handling fees" on large transactions, and then link it to a larger exchange or brokerage firm. All of this may seem like just a simple "currency exchange," but the funds will soon be channeled into deeper, more murky currents. Some people deposit USDT into local exchanges with Russian-language interfaces and then exchange it for Bitcoin and transfer it away. Others use Russian-based platforms like Garantex to launder funds into offshore accounts. Still others use it to supplement liquidity for companies in Georgia and the UAE. In the evening, he would divide the USDT he earned that day into two parts. He would sell one part for rubles to pay his mortgage and buy groceries, and the other part would lie quietly in a multi-signature wallet, waiting for the situation to change again, which might be the last insurance for his family. On the statistics table, he is just a tiny fraction of the "Russian retail investor crypto inflow". But the line connecting all these points is the invisible market. 1. After being severed, new blood vessels grew underground. Russia's crypto saga didn't begin after the sanctions. In 2020, Eastern Europe was already one of the regions with the highest volume of crime-related crypto transactions globally. Chainalysis research shows that the dark web received a record $1.7 billion in cryptocurrency that year, most of which flowed to one name: Hydra. Hydra was by far the world's largest dark web marketplace, at its peak accounting for 75% of the global dark web market's revenue. Before being shut down by German police in April 2022, it was actually a huge “dark economy hub”—drugs, fake documents, money laundering services, biometric data, all “transactions not recognized by the official world” were settled in stablecoins. Hydra's collapse did not make the chain disappear, but merely dispersed its shadow: its users, infrastructure, and intermediary network were later reassembled among Garantex, Telegram OTC, and smaller exchanges. The dark side of Russia's crypto economy did not emerge after the sanctions; it has deep historical roots. Since the outbreak of the Russia-Ukraine war in 2022 and the subsequent escalation of sanctions, Russia has been surrounded in the traditional financial world: its foreign exchange reserves have been frozen, major banks have been excluded from SWIFT, and Visa and Mastercard have collectively withdrawn. For a country whose lifeblood is energy and commodity exports, this is almost tantamount to having its throat twisted. But the numbers on the blockchain tell a different story: According to Chainalysis's statistics on European crypto activity from July 2024 to June 2025, Russia received $376.3 billion worth of crypto assets during this period, ranking first in Europe and far exceeding the UK's $273.2 billion. Russia is no longer an invisible player in Bitcoin mining. The latest estimates from hashrate data platform Hashrate Index show that by the end of 2024, Russia will account for approximately 16% of global Bitcoin hashrate—second only to the United States. These two numbers are cold and hard, but they are enough to illustrate: As the world tries to expel Russia from the traditional financial system, a new, underground crypto economy is rapidly growing. If OTC vendors like Alexei are the capillaries, then local exchanges like Garantex are the heart of the black market. Garantex was originally registered in Estonia, but its business focus has always been in Moscow. Starting in 2022, it was successively added to the sanctions lists of the US Treasury Department and the European Union, accused of facilitating ransomware, dark web transactions, and sanctioned banks. Logically, such a platform should have been defunct long ago. However, in September 2025, a report disclosed by the International Consortium of Investigative Journalists (ICIJ) revealed that despite multiple crackdowns, Garantex was actually "continuing to operate in the shadows," providing cryptocurrency exchange and transfer services to customers in Russia and the surrounding region through a series of offshore companies, mirror sites, and proxy accounts. Even more striking is an in-depth report from on-chain analytics firm TRM Labs, which points out that in 2025, Garantex and the Iranian exchange Nobitex together accounted for more than 85% of the crypto funds flowing into sanctioned entities and jurisdictions. In March 2025, Tether froze USDT wallets worth approximately $280,000 (about 2.5 billion rubles) associated with Garantex, forcing the exchange to suspend operations. However, a few months later, the U.S. Treasury Department sanctioned a new name: Grinex – “a cryptocurrency exchange created by Garantex employees to help it circumvent sanctions.” The black heart was punched, and then it began to beat again in a new form. II. A7A5: The Ambition and Paradox of "Ruble on the Chain" USDT is currently the main player in Russia's shadow economy, but in the eyes of Moscow officials, it also has a fatal problem—it is too "American" and too "centralized". In 2025, a new piece was quietly put on the table: A7A5, a stablecoin issued by a Kyrgyz platform and touted as being "ruble-pegged". A Financial Times investigation revealed that A7A5 completed transactions worth approximately $6-8 billion within four months, mostly on weekdays and concentrated during the Moscow trading session, with the custodian bank being Promsvyazbank, a Russian defense bank under sanctions. The EU and UK sanctions documents bluntly describe it as "a tool for Russia to circumvent sanctions." By October 2025, the EU officially added A7A5 to its sanctions list, and on-chain analytics firms also pointed out that it has a close connection with Garantex and Grinex—becoming a new central node in Russia's crypto clearing network. The role played by A7A5 is quite subtle: 1. For Russian companies, it is a "ruble stablecoin that can bypass the risks of USDT"; 2. For regulators, it is "an invisible tool to put rubles on the blockchain and bypass bank scrutiny." Behind this lies a growing and clear idea in Russia: "Since we cannot do without stablecoins, at least a portion of them should be printed by ourselves." The paradox is that any stablecoin that wants to go global must rely on infrastructure that Russia cannot control: public blockchains, cross-border nodes, overseas exchanges, and third-country financial systems. A7A5 aspires to be a "sovereign stablecoin," yet it is forced to circulate in a world not controlled by Russia. This is a microcosm of Russia's entire crypto strategy—it wants to break free from Western finance, yet it is forced to continue using the "on-chain financial building blocks" constructed by the West. III. What does encryption mean for Russia? Not the future, but the present. The Western world often views encryption as an asset, a technology, or even a culture. But in Russia, it plays a completely different role: 1. For businesses: Encryption is a backup channel for trade settlement. Russia imports high-tech parts, drone components, industrial instruments, and even consumer goods, many of which cannot be paid for through traditional banking systems. This has led to a clandestine but stable route: Russian companies export to the Middle East/Central Asia, where intermediaries distribute the goods to suppliers via USDT/USDC, and then the goods are returned to Moscow for OTC exchange in rubles. It is not sophisticated, romantic, or "decentralized," but it is usable, dynamic, and adaptable. Encryption is not a dream here; it is the least efficient but only dynamic form of realism. 2. For young people, crypto is an escape from their native currency. The Russian banking system has long suffered from a lack of trust, and the ruble's fragility over the years has made cryptocurrencies a natural safe haven for the middle class and young engineers. If you ask any software engineer in Moscow, they might not tell you "I trade cryptocurrency," but rather, "I convert my salary into USDT and put it with a trusted OTC team on Telegram. The bank may freeze my card, but the blockchain won't freeze me." This statement is a microcosm of contemporary Russia. 3. For nations, encryption and mining are "digital energy exports." Russia possesses one of the world's cheapest electricity sources—Siberia's hydroelectric and natural gas surplus power has become a haven for Bitcoin mining. Mining offers: an "export product" that bypasses the banking system, a globally redeemable digital commodity, and a way to circumvent financial blockades. The Russian Ministry of Finance has repeatedly acknowledged that "revenue from mining is an essential component of the country's trade system." This is no longer a grassroots activity, but a quasi-national economic sector. 4. For gray systems: Encryption is an invisible lubricant. This part is difficult to quantify, but the facts include European intelligence agencies pointing to Russian intelligence agencies using encryption for information warfare, hacking operations, large-scale underground funds shuttling between Europe and Russia via stablecoins, and various smuggling networks highly relying on on-chain funds. Is Russia a "crypto superpower"? The answer is more complex than you might imagine. If you measure it by technological innovation, no. If you look at it from the perspective of VC projects and DeFi, then it's not like that either. If you measure it by mining, on-chain transaction volume, stablecoin inflows, and trade settlement reliance, it is a crypto power center that cannot be ignored globally. It did not become "voluntarily," but rather "was pushed into becoming by the world."