Gold-Backed USDKG Stablecoin Faces Liquidation as Kyrgyzstan Orders Issuer Shutdown

TLDR

• The Kyrgyz government has mandated the wind-down of EVA and the state-run Coin Nomad Exchange.
• Token holders may contact the project via email to convert USDKG into fiat currency or USDT, though no cut-off date has been announced.
• The UK imposed sanctions on the token issuer in May as part of measures targeting Russia.
• USDKG continues to maintain its $1 peg, with 50 million units reportedly in circulation.
• Creditors have until approximately Oct. 14, 2026, to submit claims against Coin Nomad.

The Kyrgyz Republic has terminated its gold-collateralized USDKG stablecoin project, less than twelve months following its debut. Authorities have instructed both the token-issuing entity and the nation’s government-controlled digital asset platform to cease operations.

The official USDKG website confirmed the project’s termination pursuant to Cabinet of Ministers Order No. 639-t, issued on Aug. 20. The directive encompasses all blockchain-based operations.

The mandate cited efforts to enhance governmental involvement in commercial enterprises and optimize the administration of state-held assets as justification for the move.

Local news source Akchabar reported that the directive instructed the Finance Ministry to dissolve OJSC EVA, the rebranded entity that issued USDKG, alongside OJSC Coin Nomad Exchange. The stablecoin itself is not explicitly referenced in the official order.

Redemption Process for Token Holders

Individuals holding USDKG may reach out to hello@usdkg.com to convert their holdings into traditional currency or USDT. The announcement provides no specific timeline, does not identify which national currencies are accepted, and offers no details regarding identity verification procedures.

USDKG began circulating in November 2025. The token maintained a 1:1 correspondence with the U.S. dollar and was issued through an entity controlled by Kyrgyzstan’s Finance Ministry. Initial deployment occurred on the Tron network, with Ethereum compatibility introduced subsequently.

An audit conducted by Kreston Global identified 30 gold bars totaling approximately 376 kilograms supporting the asset. The precious metal holdings were assessed at $50.3 million, sufficient to fully collateralize the initial 50 million token supply.

CoinGecko data showed USDKG maintaining its $1.00 value at the time of publication. The platform reported 50 million tokens in active circulation and approximately $22,955 in 24-hour trading activity across Uniswap V3 and Curve.

The volume of tokens that will ultimately be redeemed through the liquidation process remains uncertain.

British Government Targets Issuer with Russia-Related Measures

Britain sanctioned the issuer, OJSC Virtual Asset Issuer, on May 26 through its sanctions framework addressing Russia. UK authorities stated they had “reasonable grounds to suspect” the organization had provided support to or derived benefit from the Russian government.

The enforcement actions encompassed asset freezing, restrictions on fiduciary services, director prohibitions, and internet service limitations. The designation did not allege that USDKG facilitated sanctions-circumvention transactions.

Two days following the sanctions announcement, the company underwent re-registration as OJSC EVA, Akchabar noted. No public explanation for the corporate name modification has been provided.

The sanctions created immediate market consequences. OSL HK had begun offering USDKG to qualified investors on May 21, but suspended all USDKG-related services by May 27.

Coin Nomad Exchange, representing Kyrgyzstan’s inaugural government-owned cryptocurrency trading venue, received official registration in December 2024. The Finance Ministry, serving as its exclusive shareholder, authorized voluntary dissolution on Sept. 3.

Akchabar’s reporting indicated the exchange generated net income of 1.47 million Kyrgyz soms during the first half of 2026. Nevertheless, its core operational activities produced losses, and the entity had fallen behind on certain tax obligations.

In a separate but related development, the U.S. Treasury Department classified the Russia-connected A7 Network as a transnational criminal organization on Oct. 1. That designation made no reference to USDKG or EVA.

Coin Nomad’s dissolution announcement established a one-month period beginning Sept. 14 for creditors to register claims. That submission period concludes around Oct. 14, 2026, while USDKG token redemption remains open-ended with no established termination date.