 ▲ Russia, A7A5/ChatGPT-generated image |
Russian companies seeking to neutralize Western financial sanctions are exploiting gaps in dollar dominance by operating an independent payment network based on virtual assets.
On February 21 (local time), cryptocurrency media outlet Cointelegraph reported that Russian entities under sanctions are conducting cross-border transactions using virtual asset payment infrastructures A7A5 and Parallel Network. The establishment of this payment system is seen as a decisive move by Russian firms expelled from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to settle export revenues for raw materials and procure essential goods while evading Western surveillance.
At the core of the payment process is technology that enables real-time fund transfers using dollar-pegged stablecoins. The A7A5 platform provides a channel for sanctioned companies, blocked from accessing overseas bank accounts, to verify their identities on the blockchain and request or send payments in virtual assets. Through this system, Russian firms have laid the groundwork to settle trade funds worth hundreds of millions of dollars with partners in friendly countries such as China and India without going through intermediary banks.
Experts warn that such alternative channels using virtual assets could seriously undermine the effectiveness of existing economic sanctions. The Russian government is moving forward with legislation to formalize virtual assets as a means of cross-border payment, and this payment network is rapidly expanding under tacit approval from authorities while being led by the private sector. In particular, the introduction of Layer 2 technologies like Parallel Network has reportedly enhanced transaction anonymity and secured the efficiency to process thousands of payments simultaneously.
Western financial regulators are struggling to devise countermeasures against attempts to evade sanctions through virtual assets. The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has increased pressure by blacklisting suspicious virtual asset wallet addresses, including Bitcoin (BTC), but a complete blockade remains difficult due to the decentralized nature of these networks. Industry experts predict that Russia’s case could spread to other sanctioned countries such as Iran and North Korea, creating new fractures in the global virtual asset regulatory framework.
Russian companies are expected to accelerate efforts to overcome international financial isolation by steadily increasing the share of virtual asset payments. As blockchain technology emerges as a tool to circumvent geopolitical conflicts, the political influence of digital assets is likely to grow further. Virtual assets are now solidifying their presence not merely as investment instruments but as core financial infrastructure directly tied to national economic security.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on it. The content should be interpreted for informational purposes only.*