Crypto: Kyrgyzstan shuts down its gold-backed stablecoin after Russia-linked sanctions

End of game for the dollar guaranteed by Bishkek gold. Kyrgyzstan is terminating USDKG, its public stablecoin pegged to the dollar and presented as backed by physical gold. A government decision dated August 20 orders the liquidation of its issuer EVA and Coin Nomad Exchange, the state-owned exchange platform. The project website now announces the cessation of operations, including on blockchains.

USDKG ceases operations less than a year after its official launch in November 2025.

Holders can request an exchange of their tokens for traditional currency or USDT.

The broadcaster was sanctioned by the United Kingdom on May 26, 2026 for alleged support of the Russian government.

The decision invokes the management of public assets, without explicitly naming sanctions as the cause of the liquidation.

USDKG closes after issuance of around 50 million tokens

Kyrgyz President Sadyr Japarov participated in the official launch of USDKG on November 20, 2025. The project was based on a company entirely owned by the state and on a promise: each token had to represent one dollar, with a cover in physical gold. The ceremony announced the circulation of 50 million tokens on Tron.

The volume recorded amounted more precisely to 50,140,738 USDKG, or approximately 50.14 million dollars at their nominal value. The Ministry of Finance had previously mentioned an envelope of 500 million dollars to support the project, then an increase in reserves to two billion. However, these ambitions did not correspond to programs already carried out.

USDKG aimed at cross-border payments and international trade. Its setup distinguished the monetary reference (the dollar) from the reserve asset (gold). The token should therefore not follow the price of the metal, but maintain its parity with the American currency.

The judgment now opens the question of reimbursement. The official website invites holders to contact [email protected] to request an exchange for traditional currency or USDT. However, the press release does not specify a deadline, conversion rate or detailed procedure for processing requests.

A liquidation decided after the British sanctions

On May 26, 2026, London included the issuer, then named Virtual Assets Issuer, on its sanctions list linked to Russia. The British authorities cited reasonable grounds to suspect that the company had benefited from or supported the Russian government through significant economic activities. The measures notably include an asset freeze.

Two days later, the company changed its name to EVA, according to Kyrgyz Justice Ministry data reported by Akchabar. The owner and company identifiers remained the same: this change did not correspond to the creation of a new entity.

The liquidation decision of August 20 therefore comes almost three months after the sanctions. It instructs the Ministry of Finance to close EVA and Coin Nomad Exchange, in the name of optimizing state participation in companies and improving the management of public assets. It does not explicitly present the sanctions as the reason for the judgment.