Russian Crypto Exhibition Insights: Mining Equipment Sales Booming, Exchanges Troubled by Sanctions, Stablecoins Attempting to Break Through
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Russian Crypto Exhibition Insights: Mining Equipment Sales Booming, Exchanges Troubled by Sanctions, Stablecoins Attempting to Break Through
Revealing the emerging cryptocurrency ecosystem in the CIS region and its digital financial ambitions of "de-dollarization."
Navigating Web3 tides with focused insightsBy: Joey Wu, Blockchain Insights
At the end of March 2025, a seemingly unremarkable cryptocurrency exhibition concluded in Moscow. The Crypto Summit was so small it could be "walked through in ten minutes," yet unexpectedly drew focused attention from government, industry, technology, and finance sectors: under financial blockades caused by war and sanctions, how is the CIS (Commonwealth of Independent States) region leveraging stablecoins and blockchain technology to survive and break through?
This report, based on on-site observations at the event, conversations with officials, and deep research into multiple local projects, reconstructs the emerging cryptocurrency ecosystem in the CIS region and its digital financial ambitions for "de-dollarization." The content is structured into three parts: the exhibition overview, policy analysis, and native CIS projects.
Heat Within Isolation: Observations from Moscow's Crypto Summit
The Crypto Summit took place on March 19–20 at MTS LIVE HALL in Moscow, serving as Russia’s most important annual gathering for the crypto industry. Sponsored by BingX and co-sponsored by Algorithm, the event brought together leading Chinese and Russian companies such as FBOX, Intelion, and MEXC. Topics covered included the 2025 crypto market outlook, Russian regulatory policies, BRICS digital assets, Web3 trends, mining, and investment, attracting speakers including Deputy Finance Minister Ivan Chebeskov, State Duma officials, central bank representatives, and CEOs of major firms.
The exhibition was modest in scale—the entire venue could be toured within ten minutes—yet revealed strong regional characteristics. The composition of exhibitors clearly reflected the current state of the CIS blockchain industry: 40% were mining hardware vendors, all equipment made in China, indicating Chinese manufacturers dominate the CIS mining market; 25% were cryptocurrency exchanges, including locally prominent platforms like BingX and MEXC, smaller participants like Bitget, and domestic CEXs Keine and Rapira; DEX platforms included Storm on TON and Alpha DEX focused on meme coins; 15% provided cross-border payment and asset transfer services specifically designed to help Russian businesses bypass international sanctions; 10% consisted of KOLs, media outlets, and blockchain associations, while the remainder were small projects offering compliance solutions such as anti-money laundering tools.
The language environment, communication atmosphere, and attendee demographics highlighted the extreme localization and isolation of the CIS market: most participants did not use English and had loose connections to the global crypto ecosystem. Crypto entrepreneurs are mostly active in the Middle East, with Dubai becoming the hub for Russian crypto founders; very few remain long-term in the CIS region. War, military conscription, and strict regulation have led to a “dual vacuum” of talent drain and project exodus.
However, mining stood out as a bright spot. Russian policy has shown tolerance, even encouragement, toward mining activities. Numerous Chinese exhibitors reported that "mining rigs sell exceptionally well in Russia," indicating sustained demand for hardware.
Despite its small size, the summit was treated with high importance by Russian authorities. Officials from the Ministry of Finance, Interior Ministry, parliament, and experts involved in BRICS digital economy cooperation attended the event, delivering speeches and interpreting policies to shape the future direction of crypto regulation across the CIS region.
Breaking Through Sanctions: Interpreting CIS Cryptocurrency Policy
Against a backdrop of heightened geopolitical tensions and escalating economic sanctions, Russia is gradually forming a distinctive path in cryptocurrency monetary policy. At its core, this framework aims to use stablecoins and blockchain technology to develop alternative cross-border payment systems and assert financial sovereignty outside Western-dominated financial infrastructure.
Three key policy signals emerged from the conference:
First, integrating crypto assets into the “de-dollarization” strategy by building domestic stablecoins; second, improving relevant legislation and gradually introducing oversight, including launching regulatory sandboxes in special administrative zones; third, strengthening international cooperation with BRICS nations to build a multilateral settlement framework based on mutual recognition and anchoring of national digital currencies. Overall, Russia’s crypto policy is shifting from defensive reactions to strategic planning, emphasizing the reconstruction of financial sovereignty and global settlement capabilities under sanction pressure through digital technologies.
Domestic Stablecoins
Ruble-Backed Stablecoin A7A5
In February 2025, Old Vector, a company registered in Kyrgyzstan, launched a new stablecoin called A7A5, pegged 1:1 to the Russian ruble. This digital asset aims to facilitate cross-border payments between Russia and other countries, especially under current sanction conditions. The project team stated that liquidity for the new stablecoin is backed by real bank deposits held in reliable banks (PSB) with correspondent networks in Kyrgyzstan, offering high overnight interest rates. Old Vector pledged to publish weekly reserve reports and undergo independent audits every six months.
Technical Features, Security, and Operating Environment of A7A5
A7A5 is issued on both Ethereum (ERC-20 standard) and Tron (TRC-20 standard) blockchains, ensuring broad compatibility and ease of use. Liquidity for the stablecoin comes from ruble deposits held at Promsvyazbank (PSB), which maintains correspondent relationships with financial institutions in Kyrgyzstan. Users can store A7A5 in decentralized wallets such as Trust Wallet and OKX Web3 Wallet, or in exchange accounts. To ensure security and compliance, the A7A5 smart contract includes functions to freeze (blacklist) and burn (BurnBlackFunds) tokens from certain wallets—a mechanism also used by other stablecoin issuers like Tether to prevent illicit transactions and protect users.
On March 6, 2025, Garantex suspended platform operations and trading after $25 billion worth of Tether (USDT) was frozen. In addition to the asset freeze, the U.S. Secret Service, supported by Europol and law enforcement in Germany and the Netherlands, blocked the Garantex website. U.S. authorities accused the exchange of links to ransomware hackers and darknet illegal markets. In a statement, Garantex said: "We have bad news. Tether has joined the war against the Russian cryptocurrency market and frozen our wallet containing over 25 billion rubles. We will temporarily suspend all services, including cryptocurrency withdrawals, while our entire team works to resolve this issue." Garantex claimed to be the leader in ruble liquidity, providing unrestricted access to cryptocurrencies for Russian users, supporting rubles and any Russian bank card. According to Garantex, USDT was the most popular cryptocurrency among Russians, with trading volume in the ruble-USDT pair far exceeding that of other pairs. The platform warned that all USDT tokens in wallets located in Russia might now be at risk.
On February 24, the EU added the Russian cryptocurrency exchange Garantex to its latest round of sanctions against Russia. This marked the first time the EU imposed restrictions on a Russian crypto exchange. The platform has been under U.S. sanctions since April 2022.
Official statements indicated that Garantex maintained close ties with Russian banks already sanctioned under EU regulations. Specifically, users could deposit and withdraw funds using cards from Sberbank, T-Bank (formerly Tinkoff Bank), and Alfa-Bank—all subject to European sanctions. The ruble-backed stablecoin A7A5 successfully responded to the Garantex freeze incident and was hailed as the "first self-rescue case in the crypto market." (Report source: rbc.ru)
Passive Income Mechanism of A7A5
One unique feature of A7A5 is its ability to generate passive income. According to the project whitepaper, 50% of the daily returns from overnight deposits are distributed to stablecoin holders. Accumulation occurs automatically without requiring additional user actions. Overnight deposits are short-term bank placements where funds are held overnight and returned the next day with accrued interest. If deposited before weekends or holidays, the term extends to the next business day, with interest calculated over the full period.
For example, A7A5 generates holder income by placing reserve funds into overnight deposits, delivering stable and predictable passive returns. Sergey Mendeleev, founder of InDeFi SmartBank, told Bits.media that the A7A5 contract is standard except for its automated interest calculation mechanism for token holders, effectively functioning like a bank deposit.
"I’m naturally pleased that the concept of a crypto-ruble we proposed a year and a half ago has gained so much support and solid implementation. Now we can respond to criticism from the Central Bank and Financial Monitoring Service. I hope people will be able to buy these tokens with legal tender or, conversely, sell them for real rubles at any PSB branch," said Mendeleev.
Earlier, sources cited by Hash Telegraph reported that U.S.-based Tether was actively adding wallet blacklists and blocking user access to USDT.
Exchange Availability of A7A5
Cryptocurrency exchange Garantex announced the listing of the "first securely regulated ruble stablecoin." The platform offers A7A5 trading pairs with rubles and USDT. Additionally, the Bitpapa marketplace opened up trading possibilities for crypto-rubles, expanding A7A5’s utility across various transaction scenarios. The issuer plans to release weekly reserve reports and conduct independent audits every six months to ensure transparency and maintain user trust.
The launch of A7A5 marks a significant step forward in the development of digital financial tools, helping streamline and accelerate international settlements for Russian enterprises. The combination of ruble pegging, passive income generation, and built-in security mechanisms makes A7A5 an attractive instrument for companies engaged in foreign economic activities. (Reference: vc.ru)
Russian Domestic Exchange Garantex
The cryptocurrency exchange emerged in Estonia in 2019 but initially focused on the Russian market. One of its co-founders, Sergey Mendeleev, former district head of Yasenevo in Moscow, described Garantex as an innovative crypto startup offering customers zero-spread, zero-commission fiat-to-crypto conversion services. In a 2019 interview, Mendeleev said: "We decided to temporarily run a non-commercial project whose main goal is to directly connect cryptocurrency buyers and sellers through an established average weighted exchange rate beneficial to both parties."
Mendeleev’s partner was Stanislav Drugalev, founder of hosting provider Caravan-Telecom. Under their leadership, the exchange operated for two years. In February 2021, Drugalev died in a car accident in Dubai. A month later, Mendeleev sold his stake in Garantex to Irina Chernyavskaya. His current activities remain unknown. According to The Bell, another possible co-owner of the site may be Alexander Ntifo-Siao. The U.S. Department of Justice still lists him as one of the exchange’s beneficiaries, albeit under a different name: Alexander Mira Cerda. In December 2021, he and his partner Pavel Karavitsky became co-owners of a Russian legal entity, FinTech Company, which owned the garantex.academy domain seized by U.S. authorities. Some media outlets linked Karavitsky to Russian intelligence agencies, claiming he previously served as an economic security expert at VBRR Bank and Peresvet Bank, and was also the "security officer" of Garantex Bank. It remains unclear who currently owns the cryptocurrency exchange.
What Is Garantex Known For?
After international payment systems exited Russia and banks were barred from cross-border transfers, Garantex began branding itself as a platform that "does not comply with EU and U.S. sanctions on Russian users" and cooperates with everyone.
The exchange itself was sanctioned by the U.S. as early as spring 2022, but not for aiding sanctions evasion: U.S. authorities suspected it of laundering over $100 million linked to Russia’s largest darknet market, shut down by U.S. and German intelligence in March 2022. Researchers from Chainalysis suggested even higher suspicious volumes: $645 million transferred between 2019 and 2021. Nevertheless, sanctions did not halt the exchange’s growth. Market participants told The Bell that after Binance withdrew from the Russian market, Garantex became the largest platform for ruble deposits and withdrawals. Businesses needing to pay overseas suppliers also began using the platform for crypto transactions.
In March 2024, U.S. and UK authorities began investigating $20 billion in transactions conducted via Garantex. In February 2025, the EU imposed sanctions on the platform for cooperating with sanctioned banks.
Kyrgyzstan's National Stablecoin
Gold-Backed Stablecoin Replaces CBDC
While many countries are developing central bank digital currencies (CBDCs), Kyrgyzstan has chosen a different path. Instead of creating a national digital currency, authorities opted to support USDKG, a gold-backed stablecoin. The project recently underwent an audit by Consensys Diligence, a team known for its work on MetaMask and other blockchain solutions. The audit confirmed the security of USDKG’s smart contracts, bringing the project closer to full launch.
Why Did Kyrgyzstan Abandon CBDC?
Unlike countries developing digital currencies (such as China’s digital yuan or Russia’s digital ruble), Kyrgyzstan remains skeptical of CBDCs. Key objections include centralized control—where the state would have full visibility into citizens’ transactions; privacy risks—users losing financial autonomy; and limited benefits—state-issued digital currencies do not solve volatility issues. Instead, authorities support USDKG tokens, pegged to gold prices and operating under the ERC-20 standard. Main advantages: global availability—the asset can be used for international settlements; transparency—token flows are traceable on the blockchain; stability—historically, gold has preserved value better than many fiat currencies.
The USDKG audit was conducted by Consensys Diligence, a team specializing in blockchain project security. During the review, the following aspects were examined: code correctness—ensuring smart contracts operate as intended; security—protection against potential attacks and vulnerabilities; alignment with project goals—whether contracts fully implement required features including blacklisting, compliance, and others. Several medium and low-severity vulnerabilities were identified and quickly fixed: the transferFrom() function did not respect the blacklist, potentially allowing blocked users to transact; no validation existed for empty owner or compliance addresses, risking governance failure. After fixes, Consensys confirmed the security of the USDKG smart contract, clearing the project for launch.
The USDKG token structure includes: Owner—manages issuance and burning of tokens; Compliance Team—monitors sanction lists and freezes assets when necessary; Blacklist—a mechanism to restrict suspicious wallets. Management uses Gnosis Safe multi-signature setup, enhancing security. Consensys recommends regular updates to avoid potential vulnerabilities.
Why Is Kyrgyzstan Betting on Gold?
Kyrgyzstan possesses abundant gold reserves, and digitizing gold could yield economic benefits. Potential advantages include attracting foreign investment—gold remains a popular tool for capital preservation; improved fund flow transparency—blockchain simplifies control and auditing; reduced reliance on volatile cryptocurrencies—gold-backed assets offer greater stability.
What’s Next?
The USDKG project is nearing official launch. Authorities are planning integration with banks, financial institutions, and potentially international investors. However, critical questions remain: where and how will the gold backing USDKG be stored? How will liquidity be ensured? How will global regulators respond? If successful, other countries may follow Kyrgyzstan’s model, launching tokens backed not only by gold but also by other assets such as silver, oil, or minerals. The Consensys audit confirms USDKG is a serious initiative, not just another experiment, making it one of the most interesting alternatives to CBDCs in the crypto space.
Russia’s Legal and Regulatory Framework for the Crypto Industry
Policy fragmentation and consensus: compliance, sovereignty, and coordination mechanisms. Under Russia’s current legal framework (as of early 2025): the "Digital Financial Assets Law" (in effect since 2021) formally recognizes "digital financial assets" (DFA) as a legitimate form of property. Digital assets may be used for investment but not for everyday goods and services. However, the draft "Digital Currency Law"—not yet passed—initially allowed individuals and enterprises "limited use" of cryptocurrencies, but has been stalled for years due to disagreements between the Central Bank and the Ministry of Finance. The Finance Ministry leans toward allowing crypto use in international settlements; the Central Bank emphasizes risks and prefers prohibition.
Policy discussions reveal a clear divide—laws lag behind practice, regulation remains uncertain, yet businesses are already moving forward: Russian law does not recognize stablecoins as legal means of payment, permitting their use only abroad; in reality, many enterprises already use cryptocurrencies for cross-border settlements and asset transfers; policy proposals focus on "classified regulation," distinguishing between CBDCs, stablecoins, and crypto assets, defining boundaries for each. According to Alexander Shendryuk-Zhidkov, Deputy Chair of the Budget Committee of the Federation Council, speaking at the summit, Russia plans to pilot crypto financial services in special administrative zones such as Kaliningrad and Vladivostok, establishing local policy sandboxes that allow specific companies or projects to operate under regulatory exemptions, exploring greater flexibility.
New Model
The Central Bank of Russia, acting on presidential instructions, submitted recommendations to the government regarding the regulation of cryptocurrency (digital currency) investments. The proposal allows a limited number of Russian investors to buy and sell cryptocurrencies. To achieve this, a three-year Experimental Legal Regime (ELR) is planned. Only "specifically qualified" investors would be permitted to trade cryptocurrencies within the ELR. This is a new investor classification: individuals who have invested more than 100 million rubles in securities and deposits, or earned over 50 million rubles in the previous year, would qualify. Companies meeting existing legislative qualifications for investors would also be eligible to participate. For financial institutions wishing to invest in cryptocurrencies, the Central Bank will establish regulatory requirements based on the risk profile and nature of such assets.
The introduction of the ELR aims to increase transparency in the cryptocurrency market, establish service standards, and expand investment opportunities for experienced investors willing to take on higher risks. The Central Bank has repeatedly emphasized that private cryptocurrencies are not issued or guaranteed by any jurisdiction, are based on mathematical algorithms, and are highly volatile. Therefore, investors must understand they bear the risk of potential financial loss when investing in cryptocurrencies.
The Central Bank still does not recognize cryptocurrencies as payment instruments and proposes banning residents from using them for transaction settlements outside the ELR, with penalties for violations. Outside the experimental regime, all qualified investors would be allowed to invest in settlement derivatives, securities, and digital financial assets that do not deliver actual cryptocurrencies to investors but whose returns are linked to their value.
Russian exporters and importers would be allowed to use cryptocurrencies for cross-border settlements under foreign trade agreements, but only within the Experimental Legal Regime (ELR). Additionally, the State Duma passed a law allowing the use of foreign digital rights in Russia and Russian digital rights abroad, thereby expanding mechanisms for using digital rights in foreign trade settlements.
The law also defines procedures and conditions for cryptocurrency mining and introduces related basic terms and definitions. Under the mining law effective November 24, individual entrepreneurs and legal entities registered in the special registry of the Federal Tax Service (FTS) may legally conduct mining. Individuals may mine without registration but must comply with energy consumption limits set by regional authorities. (Reference: cbr.ru/press/event)
Cross-Border Payments and International Cooperation
Russia places high importance on cooperation with BRICS nations, advocating for collaboration to build an independent clearing system. Officially, Russia clarifies that the BRICS mechanism does not aim for a unified "BRICS Coin," but rather promotes multilateral recognition and anchoring between national stablecoins and digital assets of member countries, aiming to construct a regional financial network capable of circulation without dependence on the U.S. dollar. Meanwhile, to circumvent Western sanctions restricting cross-border payments, Russian companies are establishing legal entities in "friendly countries" such as the UAE, issuing private-chain stablecoins deployed solely for specific trade and investment scenarios, bypassing public markets and Western regulators, and building a more resilient and controllable digital payment network.
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