Kyrgyzstan winds down USDKG stablecoin

Kyrgyzstan is shutting down USDKG, the gold-backed dollar stablecoin it launched in November 2025. The government has ordered the liquidation of OJSC EVA, the state company that issued the token, and of Coin Nomad Exchange, the country's first state-owned crypto exchange.

Both entities were wholly owned by the Ministry of Finance. The decision was set out in a Cabinet of Ministers order dated 20 August 2026 and became widely reported this month.

What USDKG was

USDKG was designed to track the US dollar one-for-one and was backed by physical gold. An independent reserve check reported about 376 kilograms of gold held in 30 bars, valued at roughly 50.3 million dollars at prices from November 2025. Around 50 million tokens are in circulation, and the project was mainly intended for cross-border settlements.

The sanctions background

In May 2026 the United Kingdom designated the issuer, saying there were reasonable grounds to suspect it had obtained business benefits of economic significance to the Russian government. Shortly afterwards the company changed its registered name to OJSC EVA, and a licensed Hong Kong trading venue stopped trading the token. Kyrgyz officials have described the closure as part of optimising the management of state-owned assets.

What happens to holders

According to the liquidation notice, holders can contact the project to exchange USDKG for fiat currency or for USDT. Reports note that the notice does not set a redemption deadline, does not list which fiat currencies are available and does not describe detailed verification steps. A separate notice for Coin Nomad gave creditors one month from its 14 September publication to file claims. Data trackers show USDKG still trading close to one dollar, with very low daily volume.

Gold-backed stablecoins in context

Most stablecoins are backed by cash and short-term government debt. Gold-backed tokens are a much smaller group: they link a digital token to physical metal held in vaults, and depend on regular audits to prove that the gold exists and is not pledged elsewhere. USDKG was unusual because it used gold to support a dollar peg rather than to track the gold price itself.

Why it matters for payments

The case shows that a strong reserve is not enough on its own. A stablecoin used for payments also depends on legal certainty, access to banks and trading venues, and compliance with sanctions rules in every market it touches. When one of these breaks, liquidity can disappear quickly even if the token keeps its peg. For businesses that accept or settle in stablecoins, it is a reminder to check who stands behind a token and under which rules it operates.

A wider pattern of scrutiny

The closure comes as Western governments look more closely at payment networks in Central Asia that may help move funds linked to sanctioned parties. Several state-backed or state-linked digital currency projects around the world are now under review, and regulators are paying closer attention to how reserves are audited and how redemption works in practice.

What to watch next

Key questions are how quickly holders can redeem, whether the gold reserve is fully paid out, and whether Kyrgyzstan pursues a different digital currency design, such as its own central bank digital currency, in place of a state-issued stablecoin.

What it means for ODIX Pay users

The story shows why widely used, well-reserved dollar stablecoins matter to people who rely on them. If you are asking what is a stablecoin, it is a digital token built to keep a steady value, usually one US dollar. In the ODIX Pay app you can buy crypto with a credit card or debit card, choosing the dollar stablecoins USDT or USDC. Availability depends on your country, and every fee is shown before you confirm. See how to buy USDT and USDC with your card.