Kyrgyzstan has ordered the shutdown of two central components of its state-backed cryptocurrency program. On August 20, 2026, the country's Cabinet of Ministers issued Order No. 639-t, mandating the liquidation of OJSC EVA, the issuer of the gold-backed USDKG stablecoin, and OJSC Coin Nomad Exchange, the nation's first state-owned digital-asset trading platform. USDKG launched in November 2025.

What the Order Does

The cabinet order targets both entities simultaneously, removing the stablecoin's issuer and a piece of the country's domestic trading infrastructure in a single measure.

The decision follows UK sanctions. On May 26, 2026, the United Kingdom sanctioned Virtual Asset Issuer, the stablecoin's issuer, over suspected economic ties with Russia. Kyrgyz officials, however, have not attributed the shutdown to London's actions. They have framed the liquidation as part of a broader effort to improve how the state manages its assets, and the sanctions are not directly cited as the cause of the company's operational difficulties.

Coin Nomad Exchange has entered voluntary liquidation following a shareholder vote on September 3, 2026. Creditors have until approximately October 14, 2026, to file claims.

Where That Leaves USDKG Holders

At the time of the liquidation announcement, approximately 50 million USDKG tokens were listed as circulating, and the token continued to trade close to $1 on various platforms.

USDKG was designed as a dollar-pegged token set at 1:1 with the US dollar but backed by physical gold rather than dollar reserves. Kreston Global initially verified the reserves at roughly 376 kilograms of gold, valued at approximately $50.3 million at the time of verification.

Gold-backed designs are a niche within the broader stablecoin market, where the largest dollar-pegged coins come from private issuers holding dollar-denominated reserves. USDKG departed from that convention on both counts, pairing gold backing with a state-linked issuer.

Holders have been instructed to email the issuer to request redemption in fiat currency or USDT. No redemption deadline has been specified, and detailed verification procedures have not been laid out.

How Kyrgyzstan Got Here

USDKG was intended to support cross-border payments and raise Kyrgyzstan's profile in digital finance. The arrangement paired a state-linked, gold-backed stablecoin with a state-owned exchange, providing both an asset and a domestic trading venue under government ownership.

That structure concentrated control over the token and its trading venue in state hands — a contrast with the private-issuer model that dominates the sector — and left the program's fate with the same government that launched it.

The UK sanctions triggered operational challenges and set off a restructuring of the companies involved, which has now concluded with liquidation orders for both the issuer and the exchange.

The timeline was compact: a launch in November 2025, sanctions on the original issuer in May 2026, a cabinet order in August, and a shareholder vote at Coin Nomad in early September — a full cycle from rollout to liquidation orders in under a year.

What Remains Unclear

The token trades near $1, but a stablecoin's value ultimately depends on whether redemption requests are actually processed. With no published deadline or clearly defined verification process, holders are relying on the issuer to honor requests as it winds down operations.

The most recent cited verification of the gold reserves—about 376 kilograms worth approximately $50.3 million—dates to the start of the project. Holders deciding between redeeming and holding their tokens do not have more recent confirmation of the assets backing the roughly 50 million tokens still outstanding. Regular reserve attestations are common among major stablecoin issuers, making the absence of an updated review a concrete open question as the wind-down proceeds.

The key dates to watch are the October 14, 2026 creditor filing deadline at Coin Nomad and any further guidance from EVA on how redemptions will be handled. Any updated reserve verification or published redemption procedure would address the two main gaps holders currently face.