Kyrgyzstan orders USDKG stablecoin and Coin Nomad Exchange to shut down after UK sanctions

Kyrgyzstan has ordered the liquidation of EVA, the issuer behind its state-backed stablecoin USDKG, effectively bringing the project to an end. The country’s Cabinet of Ministers also directed the Ministry of Finance to shut down Coin Nomad Exchange, Kyrgyzstan’s first state-owned cryptocurrency exchange.

Government action targets USDKG and Coin Nomad Exchange

The decision follows several months after the United Kingdom sanctioned the issuer for alleged ties to Russia. However, Kyrgyz authorities did not cite the UK action in their official explanation. Instead, officials described the move as part of efforts to optimize state participation in companies and improve asset management efficiency. The order was made public on October 7, 2026.

EVA, officially registered as Issuer of Virtual Assets, is a state-owned company founded by the Ministry of Finance. Both EVA and Coin Nomad Exchange fully operated under state control, with the stablecoin project issuing just over 50 million USDKG tokens.

Launched in November 2025, USDKG was promoted as the world’s first state-backed stablecoin supported by physical gold reserves. Each USDKG token was pegged 1:1 to the US dollar, ensuring a direct link to gold. The stablecoin operated on the Tron blockchain.

In May 2026, USDKG began trading on Hong Kong’s regulated OSL platform, paired against USDT. Authorities presented the stablecoin as a tool for cross-border settlements, with original plans to maintain the project until at least 2034.

With the liquidation order now in effect, USDKG holders have the option to redeem their tokens for fiat currency or USDT as the project winds down.

Authorities in Kyrgyzstan liquidated both EVA and Coin Nomad Exchange, stating the process would contribute to optimization of state assets and improve management efficiency, while USDKG holders can exchange their tokens for fiat or USDT.

Coin Nomad Exchange was the country’s first government-owned crypto exchange, created to facilitate trading of USDKG and other digital assets.

Mini dictionary: Coin Nomad Exchange, Kyrgyzstan’s first state-owned digital asset exchange, was designed to provide direct market infrastructure for stablecoin and crypto trading under government oversight.

Sanctions tied to alleged Russian links

On May 26, the United Kingdom added the Virtual Asset Issuer to its sanctions list, alleging the company’s business held economic importance for the Russian government. The sanctions explicitly listed both the USDKG token and its project website. Two days later, the issuer re-registered as EVA and became tied to a wider sanctions package targeting several crypto-linked structures, including those associated with the Russian A7 network and the ruble-pegged A7A5 stablecoin.

Previous reports accused the USDKG project of aiding Russian authorities in bypassing international restrictions, focusing on potential support provided to Moscow. Kyrgyzstan officials issued the liquidation order shortly after these allegations, though the stated reason was unrelated to international pressure.

The United States also took independent action against A7. On October 1, the US Treasury labeled A7 as a “shadow banking entity” providing support for sanctioned states. Iran was reportedly using this infrastructure to evade international measures. In the same period, the Office of Foreign Assets Control described A7 as a “transnational criminal organization.”

Mini dictionary: The A7 network refers to a Russia-linked crypto project accused by Western authorities of facilitating financial operations for sanctioned entities, including the distribution of stablecoins pegged to traditional currencies such as the Russian ruble.