Kyrgyzstan is winding down USDKG – a state-backed stablecoin with gold backing – and liquidating both its issuer and the country's first state cryptocurrency exchange. The government has ordered the liquidation of EVA, which issued USDKG, as well as the state exchange Coin Nomad Exchange. Authorities described this as an attempt to optimize state participation in companies and improve the management of state assets.
USDKG was launched in November 2025 with just over 50 million tokens, each maintaining a peg to $1 with physical gold backing. The project was aimed at cross-border payments and was initially positioned as long-term. According to the project's official account on X, operations are ceasing in accordance with order No. 639-t of the Cabinet of Ministers of the Kyrgyz Republic dated August 20, 2026. Holders can request redemption in fiat or USDT. All 50,140,738 tokens are planned to be collected into one wallet in each supported network and transferred to burn addresses, after which smart contracts on Tron and Ethereum will be suspended, and USDKG will be delisted from centralized and decentralized exchanges. For holders, this is an active redemption event, not just an abandonment of the crypto project.
The closure followed growing international attention: on May 26, the UK imposed sanctions against Virtual Assets Issuer, later known as EVA, and specifically mentioned USDKG and USDKG com in the notice. The official reason for liquidation, as stated by the Kyrgyz side, is asset management optimization, not sanctions.
USDKG stood out among stablecoins: the state-controlled issuer combined a dollar peg with gold backing. The collapse less than a year after launch highlights another risk for state-linked crypto assets: regulatory and sanction exposure can be as significant as reserves, technology, or the peg itself.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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