A cabinet order ends the state-owned USDKG project and liquidates both the issuer and the state crypto exchange Coin Nomad. Holders can redeem for cash or USDT. The order itself cites the management of state assets.
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A government-backed dollar stablecoin in Central Asia is being wound down, and the timeline lines up with Western sanctions even though the official order does not mention them.
Kyrgyzstan's Cabinet of Ministers has ended the USDKG stablecoin project, "including its activities on blockchain networks," under Order No. 639-t, dated and published this week on the project's website. The issuer, EVA, formerly the joint-stock company Virtual Asset Issuer and wholly owned by the Finance Ministry, will be liquidated. So will Coin Nomad, the state crypto exchange.
Holders can exchange USDKG for fiat currency or USDT through the project.
The sanctions sequence
On , the U.K. added Virtual Asset Issuer to its Russia sanctions list, naming USDKG and USDKG.com as aliases. Three months later the cabinet signed the order to end the project. The order cites optimizing the state's participation in companies, not sanctions. The sequence is clear. The government's stated reason is administrative.
What USDKG was
The token launched on the Tron blockchain in November 2025 with 50 million tokens issued. It was described as backed by gold, and an audit in December 2025 counted 30 bars weighing about 376 kilograms. It gained an over-the-counter listing in Hong Kong in May 2026. Coin Nomad began voluntary liquidation in September.
The 50 million tokens represent the amount issued, not a market value, and holders are being offered redemption rather than facing a write-off. Kyrgyzstan's separate stablecoin pegged to its own currency, KGST, continues.
The regional contrast
The closure comes the same week that Tether signed a memorandum of understanding with Kazakhstan's central bank and the Alatau City Authority to study a stablecoin pegged to the tenge. Two neighbors are moving in opposite directions on state-linked stablecoins.
Sanctions and the Government’s Stated Rationale
One reading is that sanctions made the project unviable. Banks, exchanges and counterparties avoid designated entities, and a stablecoin cannot function without them.
A second reading takes the order at its word: a small state project being folded as part of a broader cleanup of government holdings.
A third reading is that the project was small enough that its closure matters mainly as a precedent, showing that sanctions can shut a sovereign stablecoin, with implications for other state projects that have Russia-linked exposure.
Redemption and spillover
The pace of redemptions, whether any holders report difficulty exchanging tokens, and whether other sanctioned or sanctions-adjacent state crypto projects in the region change course will show whether USDKG is a one-off or a template.