On October 7, it was announced that Kyrgyzstan would cease operations of its state-issued stablecoin, USDKG. Holders of the token are being offered the option to exchange it for fiat currency or USDT, as stated on the official project website.
The decision was based on Cabinet of Ministers Order No. 639-t from August 20. This document was adopted to "optimize the state's participation in economic societies" and enhance the management of state assets.
It also annulled several previous government decisions.
Specifically, the order nullified the November 2024 directive approving the roadmap for the pilot "Cryptocurrency" project, which was intended to introduce new financial instruments and attract additional investments.
The Ministry of Finance has been instructed to wind down the issuer of USDKG, the Joint Stock Company "Issuer of Virtual Assets," and the Joint Stock Company "Coin Nomad Exchange," the country's first state cryptocurrency exchange.
The exchange has already initiated voluntary liquidation. This decision was made on September 3 by its sole shareholder, the Ministry of Finance.
In the first half of 2026, the platform reported a net profit of 1.47 million soms, despite its core operations remaining unprofitable.
Future of USDKG
The project's website does not specify the timeline for token redemption, the process for settling with holders, or the total amount of USDKG that has been submitted for exchange.
Additionally, the future of the gold reserves backing the stablecoin remains undisclosed after the settlement and liquidation of the issuer.
At the time of this writing, the project's transparency page was no longer accessible. According to blockchain explorers, there were still 50 million USDKG in circulation: 47 million on the TRON network and 3 million on Ethereum.
The reserves were audited by the international network Kreston Global, which confirmed in December 2025 that there were 30 gold bars weighing approximately 376 kg.
Sanction Considerations
The order cites the restructuring of state asset management and does not link the liquidation of USDKG to international sanctions. The government issued this order three months after the stablecoin's issuer was placed under British restrictions.
On May 26, the UK added the Joint Stock Company "Issuer of Virtual Assets" to its sanctions list as part of measures against Russia. USDKG and USDKG.com were noted as alternative names in the company's profile.
London stated there were "reasonable grounds to suspect" that the organization benefited from the Russian government or supported it through economically significant activities.
Company assets were frozen, and other restrictions were imposed, including a ban on executive positions for its directors and limited access to its online services from the UK.
The USDKG issuer was included in a broader package of sanctions against cryptocurrency and financial networks that the UK associates with evading restrictions against Russia. Two days later, the firm was re-registered as the Joint Stock Company "EVA."
Less Than a Year Since Launch
The initial issuance of USDKG officially took place on November 20, 2025, with the participation of Kyrgyz President Sadyr Japarov. At that time, 50 million tokens valued at $1 were issued on the TRON network. The issuer was 100% state-owned.
The project was marketed as a tool for developing Web3 infrastructure, attracting investment, and facilitating international transactions.
In May 2026, USDKG became available to professional investors on the over-the-counter platform regulated by Hong Kong's OSL. The token was also traded on decentralized exchanges such as Curve and Uniswap and supported by various cryptocurrency wallets.
However, the discontinuation of this stablecoin does not signify the end of all government crypto initiatives. The KGST stablecoin, pegged to the som at a 1:1 ratio, continues to operate in the country.
According to Binance, in August, this asset ranked among the top three most traded tokens among new users on the exchange in Kyrgyzstan.
Meanwhile, the National Bank has been tasked with developing a foundational digital som platform and conducting pilot testing by December 31, 2026. From 2027, real-world trials are expected to commence, followed by a phased rollout across the nation.
Notably, in September 2025, the National Bank of Kazakhstan announced the launch of a pilot stablecoin, Evo, pegged to the tenge. The asset issuance on the Solana blockchain was undertaken by participants in the regulatory sandbox, including the cryptocurrency exchange Intebix and the Eurasian Bank.
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