Kyrgyzstan Shuts Down $50 Million USDKG Gold-Backed Stablecoin Project
Kyrgyzstan has decided to shut down USDKG, a $50 million state-backed stablecoin project backed by physical gold, and ordered the liquidation of its issuer EVA and Coin Nomad Exchange, the country's first state-owned crypto exchange, according to Wu Blockchain.
USDKG Project to Be Liquidated
USDKG was launched in November 2025 as a stablecoin pegged 1:1 to the U.S. dollar and backed by physical gold. The project was designed primarily to support cross-border payments, combining a dollar-linked digital asset with markets reserves in physical gold.
The decision to end the project comes only months after authorities associated with the stablecoin faced action from the United Kingdom. In May 2026, the UK sanctioned EVA, the issuer of USDKG, over alleged support for Russia.
State-Owned Crypto Exchange Also Affected
The shutdown extends beyond the stablecoin itself. Kyrgyzstan has also ordered the liquidation of Coin Nomad Exchange, described as the country's first state-owned crypto exchange, alongside the liquidation of EVA.
The measures effectively bring an end to the state-backed initiative that had been established less than a year earlier. USDKG's stated structure combined a 1:1 U.S. dollar peg with physical gold backing, while its primary intended use was cross-border payments.
Wu Blockchain reported the decision as Kyrgyzstan ends the USDKG project following the sanctions imposed on its issuer in May 2026. The project had been launched in November 2025 with a reported value of $50 million, making its closure a significant reversal for the country's state-backed digital-asset initiative.
Writer: Victoria HaleTechnology & Blockchain WriterVictoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.She prioritises clarity and accuracy when explaining technical developments to a general audience.
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