- USDKG ends as Kyrgyzstan orders liquidation of its issuer and state-owned crypto exchange.
- UK sanctions targeted USDKG’s original issuer months before Kyrgyzstan ordered its closure.
- USDKG holders can redeem tokens for fiat or USDT as the state-backed project winds down.
Kyrgyzstan has ended its state-backed USDKG stablecoin project and ordered the liquidation of its issuer and state-owned crypto exchange. The shutdown follows the project’s launch in November 2025 and UK sanctions against its issuer in May 2026.
Kyrgyzstan Orders USDKG Project Liquidation
According to a Wu Blockchain post on X, Kyrgyzstan has moved to shut down USDKG, a gold-backed stablecoin launched in November 2025. The government also ordered the liquidation of EVA, the token’s issuer, and Coin Nomad Exchange, the country’s first state-owned crypto exchange.
The decision follows Cabinet of Ministers Order No. 639-t, dated August 20, which aimed to optimize state participation in commercial entities and improve state asset management. The order also revoked earlier decisions connected to the country’s cryptocurrency pilot program.
USDKG was introduced with a registered supply of slightly more than 50 million tokens. The asset was pegged 1:1 to the U.S. dollar and backed by physical gold held as reserves. Authorities promoted the stablecoin as a tool for cross-border payments and broader digital asset development.
Kyrgyzstan Ends State-Backed Stablecoin Project Months After UK Sanctions
Kyrgyzstan has decided to shut down USDKG, its $50 million state-backed gold stablecoin project, and ordered the liquidation of issuer EVA and Coin Nomad Exchange, the country’s first state-owned crypto… pic.twitter.com/3atYDBlurm
— Wu Blockchain (@WuBlockchain) October 8, 2026
The first issuance contained 50 million tokens on the Tron blockchain. Ethereum support was later introduced, while the token also became available through decentralized trading platforms.
Kreston Global reviewed a reserve of 30 gold bars weighing about 376 kilograms. The reserves were valued at about $50.3 million based on November 2025 gold prices, providing backing for the initial issuance.
USDKG holders can currently request redemption for fiat currency or USDT. However, the project has not published a final redemption deadline or detailed settlement procedures.
UK Sanctions Preceded USDKG Shutdown
The shutdown comes months after the United Kingdom sanctioned USDKG’s original issuer, Virtual Asset Issuer, on May 26, 2026. British authorities said there were reasonable grounds to suspect the company had supported or benefited from Russia’s government through economically significant business activities.
The UK designation included USDKG and USDKG.com as associated names. It imposed asset-freezing measures and additional restrictions affecting the company’s operations and management.
Two days after the sanctions, the issuer was re-registered as EVA. The government has not officially stated that the UK sanctions caused the subsequent liquidation.
Even so, the timing places the shutdown against growing international scrutiny of crypto infrastructure linked to Russia and sanctions evasion.
USDKG had reached the regulated Hong Kong platform OSL shortly before the UK designation. OSL subsequently announced that USDKG services would stop after the sanctions were imposed.
Coin Nomad had also entered voluntary liquidation in September. Its sole shareholder, the Ministry of Finance, approved the process on September 3, while creditors were given a limited period to submit claims.
Overall, the USDKG closure marks the end of Kyrgyzstan’s attempt to establish a government-backed, gold-supported dollar stablecoin. The country continues developing other digital currency initiatives, including plans for a digital som pilot.
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