Oleg Ogienko, the director for Regulatory and Overseas Affairs at A7A5, has addressed compliance concerns regarding his company’s ruble-denominated stablecoin, which has seen rapid growth in the market. Speaking at the Consensus conference in Hong Kong, Ogienko emphasized that A7A5 operates within the legal framework of Kyrgyzstan, where it is based, and maintains strict compliance measures.
“We are fully compliant with the regulations of Kyrgyzstan. We do not do illegal things,” Ogienko stated, underscoring the importance of regular audits and robust anti-money laundering (AML) practices. However, the company’s affiliates, including Old Vector LLC and A7 LLC, along with their banking partner Promsvyazbank, are currently under U.S. sanctions, which complicates their operations in dollar-denominated markets.
Despite these restrictions, Ogienko noted that A7A5 has become a vital tool for Russian businesses facing banking limitations due to international sanctions. The stablecoin has facilitated cross-border payments and provided access to liquidity in USDT through decentralized finance (DeFi) channels, without directly holding dollar stablecoins.
Last year, A7A5’s circulating supply surged by nearly $90 billion, surpassing the growth of major competitors like USDT and USDC. This unexpected rise is attributed to the demand from businesses in regions such as Asia, Africa, and South America, which require reliable payment mechanisms for trade with Russian entities.
Ogienko acknowledged the challenges posed by sanctions but argued that they have not halted business operations. Instead, he described the situation as an obstacle that has fostered demand for A7A5’s services. He aims to expand the stablecoin’s use, targeting a goal of settling over 20% of Russia’s trade volumes in A7A5.
Currently, the liquidity for A7A5 is constrained, as centralized exchanges are hesitant to list the token due to potential risks of secondary sanctions. While DeFi liquidity pools exist, they are limited, prompting Ogienko to seek partnerships with various exchanges during his time in Hong Kong.
Although A7A5 was not a sponsor at the Consensus event, the presence of a U.S.-sanctioned entity raised concerns among organizers and sponsors. This scenario mirrored a previous incident at Token2049 in Singapore, where A7A5 faced similar scrutiny, leading to the removal of its references from promotional materials.
Despite the political and regulatory hurdles, Ogienko remains optimistic about the future of A7A5. He is actively engaging with Russian authorities to discuss blockchain regulations and financial infrastructure, positioning the company as a neutral business entity focused on trade rather than political agendas.
“We’re not politicians. We are traders. We are businessmen,” he said, reiterating A7A5’s commitment to fostering international cooperation.
Oleg Ogienko, director of A7A5, defends the compliance of his ruble-pegged stablecoin amid U.S. sanctions, emphasizing its role in facilitating trade for Russian businesses. Despite challenges, he aims for significant growth in trade settlements using A7A5.