Kyrgyzstan is preparing to shut down USDKG, its $50 million state-backed gold stablecoin, after the government ordered the liquidation of the token's issuer, EVA, along with Coin Nomad Exchange, the country's first state-owned cryptocurrency exchange. The Cabinet of Ministers instructed the Ministry of Finance to liquidate both entities in an order reported on October 7, 2026.

The decision comes months after the United Kingdom sanctioned the issuer over alleged support for Russia. The official explanation offered by the government does not mention the sanctions. USDKG holders can exchange their tokens for fiat money or USDT as the project winds down.

Government Orders Liquidation of Issuer and Exchange

Under the order, the Cabinet of Ministers directed the Ministry of Finance to liquidate EVA and Coin Nomad Exchange. Coin Nomad Exchange operated as the first state-owned crypto exchange in Kyrgyzstan. The government framed the move as the “optimization of state participation in companies and increasing the efficiency of state asset management.” The order effectively ends both the stablecoin project and the state's direct ownership of a cryptocurrency trading platform. With the Ministry of Finance now responsible for carrying out the liquidation, how the shutdown is executed — and how smoothly holders move through the redemption process — stands out as the immediate operational detail to follow.

News of the shutdown was highlighted by crypto news account Wu Blockchain:

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…

— Wu Blockchain (@WuBlockchain) (@WuBlockchain) October 8, 2026

A Fully State-Controlled Stablecoin Project

The issuer was originally registered as Issuer of Virtual Assets, a state-owned company for which the Ministry of Finance served as the sole founder. The registered issue amounted to just over 50 million tokens, meaning the project remained fully under state control.

USDKG launched in November 2025 as the world's first state-backed stablecoin supported by physical gold. The token was pegged 1:1 to the U.S. dollar, with gold backing and dollar pricing forming the core of its design, and it ran on the Tron blockchain.

In May, the token received a listing on OSL, a Hong Kong-regulated platform, where trading took place in the USDKG/USDT pair. Kyrgyz authorities positioned the stablecoin as a tool for cross-border settlements and had to develop the project until at least 2034. The liquidation thus ends the project years ahead of that development horizon.

UK Sanctions and Links to the A7 Network

On May 26, the United Kingdom added the Virtual Asset Issuer company to its sanctions list. British authorities accused the company of conducting business “of economic importance to the government of the Russian Federation.” The sanctions document names the USDKG token and the USDKG.com website among associated entries — an inclusion that shows the UK designation reached past the issuing company to the digital asset itself and its online presence.

Two days later, on May 28, the issuer was re-registered under the shorter name EVA. The Kyrgyz stablecoin issuer appeared in a sanctions package alongside other crypto structures that the United Kingdom linked to the Russian A7 project and the A7A5 ruble stablecoin.

Earlier reports had accused the project of helping Russian authorities circumvent international sanctions, with the allegations focusing on possible assistance to Moscow in avoiding restrictions. The liquidation order follows those allegations, although the Kyrgyz government has put forward a different official explanation. That contrast is the backdrop against which the liquidation will now proceed.

The United States has taken separate action against A7. On October 1, the U.S. Treasury Department declared A7 a “shadow banking entity,” stating that Iran used the structure to circumvent sanctions. At the same time, the Office of Foreign Assets Control labeled A7 a “transnational criminal organization.”

Source: Blockonomi