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Kyrgyzstan is winding down USDKG, its gold-backed stablecoin, less than a year after launch, and liquidating both the issuer and the country’s state-owned crypto exchange. Holders have no published deadline. They must email the project to swap tokens for fiat or USDT.
For holders, the immediate question is what happens to the tokens still in circulation. The project says users can request an exchange of their USDKG holdings for fiat currency or USDT by contacting its official email address.
The shutdown comes only months after Britain sanctioned the entity that originally issued the token, adding another layer to the abrupt end of a project that Kyrgyzstan had positioned as a major state-backed digital-asset initiative.
The USDKG stablecoin entered circulation in November 2025 as a token designed to maintain a 1:1 peg with the U.S. dollar while being backed by physical gold.
Its initial issuance was associated with roughly $50 million worth of tokens. An independent review by Kreston Global examined 30 gold bars weighing approximately 376 kilograms and valued the reserves at about $50.3 million using the LBMA gold price on Nov. 28, 2025. The review covered the existence, ownership, documentation and custody of the gold reserves.
That reserve structure was central to the project’s pitch: combine the familiar price reference of the U.S. dollar with tangible gold held in reserve.
The current shutdown, however, shifts the focus from issuance and adoption to redemption.
The official USDKG website does not currently provide a specific final redemption deadline, detailed verification procedure or a breakdown of which fiat currencies will be available. Instead, it directs holders to contact hello@usdkg.com to arrange conversion into fiat or USDT.
That leaves an important operational question unanswered: how much of the outstanding supply will actually be presented for redemption during the liquidation process?
The USDKG stablecoin may still appear normal on blockchain explorers and market-data platforms, but the project’s official announcement means the underlying operation is no longer being expanded as an ongoing state-backed stablecoin initiative.
The shutdown follows Britain’s decision in May to sanction OJSC Virtual Asset Issuer, the company that issued USDKG before it was re-registered as OJSC EVA.
On May 26, the UK government designated the entity under its Russia sanctions regime. British authorities said there were reasonable grounds to suspect the company had obtained a benefit from, or supported, the Russian government through business of economic significance to Russia. The measures included an asset freeze and additional restrictions. Local reporting showed that the company was re-registered as EVA two days after the UK designation, although no official explanation has publicly established that the name change was caused by the sanctions.
The designation came as Britain broadened its crackdown on crypto and financial infrastructure that it said could help Russia circumvent sanctions.
Foreign Secretary Yvette Cooper said at the time that the UK would act with allies to “expose, disrupt and dismantle” networks supporting Russia’s aggression. Reuters reported that the wider sanctions package focused on what London described as shadow financial systems underpinning Russia’s war economy.
Importantly, the UK’s designation of the USDKG issuer should not be conflated with a finding that the USDKG token itself was used for sanctions evasion. The specific designation concerned the issuer and its alleged economic significance to the Russian government.
The timing nonetheless proved consequential. OSL HK had announced a USDKG/USDT OTC market for professional investors on May 21. Days later, following the UK designation, the exchange announced that USDKG services would be discontinued.
For the USDKG stablecoin, the sequence represented a sharp reversal. A project that had only recently been gaining access to an international trading venue was suddenly facing restrictions around its issuer and shrinking market access.
Despite the project’s termination, market data has not necessarily reflected the same degree of disruption.
CoinGecko data cited in the original reporting showed the USDKG stablecoin trading around $1, with approximately 50 million tokens listed as circulating. Trading activity was comparatively small, with liquidity concentrated on decentralized markets including Uniswap and Curve.
That near-dollar price is notable, but it should not be interpreted as evidence that the project remains operational.
A stablecoin can continue trading on secondary markets after an issuer stops expanding or supporting the underlying project. In USDKG’s case, the official website now explicitly says operations are ending.
The token’s technical infrastructure also illustrates the distinction between an asset existing on-chain and the organization behind it continuing to operate. USDKG was deployed initially on Tron and later supported on Ethereum. Its smart-contract architecture gave the issuer authority over functions including minting and redemption.
The gold backing was independently examined at launch, but the present liquidation creates a different test: whether holders can efficiently convert their tokens into the promised redemption assets.
The USDKG stablecoin therefore enters its final phase with two very different realities. On-chain, the token can remain visible and trade close to its $1 reference price. Operationally, however, the project is being wound down.
The stablecoin’s closure is happening alongside the liquidation of Coin Nomad Exchange, Kyrgyzstan’s first state-owned cryptocurrency exchange.
Coin Nomad’s sole shareholder, the Ministry of Finance, approved voluntary liquidation on Sept. 3, according to local outlet Akchabar. The liquidation announcement was published on Sept. 14, giving creditors one month to submit claims.
The exchange was registered in December 2024 with authorized capital of 100 million Kyrgyz soms. Akchabar reported that Coin Nomad recorded a net profit of 1.47 million soms during the first half of 2026, although its core operations remained loss-making and the company had outstanding tax and statutory obligations.
Taken together, the liquidation of EVA and Coin Nomad represents a significant retreat from the state-backed crypto infrastructure Kyrgyzstan had been building.
The USDKG stablecoin launched with an ambitious proposition: a dollar-pegged digital asset supported by physical gold and connected to state institutions. Less than a year later, holders are being directed toward redemption while the companies behind the project move toward liquidation.
For USDKG holders, the next stage is no longer about adoption, listings or expansion. It is about execution — specifically, how quickly and transparently the remaining supply can be redeemed as the project disappears from Kyrgyzstan’s state-backed digital-asset landscape.
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