Kyrgyzstan orders liquidation of state-backed stablecoin issuer USDKG and Coin Nomad Exchange

Kyrgyzstan’s Cabinet has ordered the Ministry of Finance to liquidate USDKG issuer “EVA” and the country’s first state crypto exchange, “Coin Nomad Exchange.” For high-risk payment providers, the point is simple: a state-branded crypto project can be built, listed, sanctioned, and then wound down within months.

1. The official rationale is “optimization of state participation in companies and improving the efficiency of management of state assets.” Owners of USDKG stablecoins have been offered a choice: exchange them for fiat money or USDT.
2. USDKG was pitched as the world’s first state stablecoin backed by physical gold and pegged 1:1 to the US dollar. The issuer was the state company “Virtual Assets Issuer,” whose sole founder was Kyrgyzstan’s Ministry of Finance, and the registered issuance came to just over 50 million tokens.
3. The token ran on the Tron blockchain and, in May, was listed on Hong Kong regulated platform OSL in the USDKG/USDT pair. Kyrgyz authorities positioned it as a tool for cross-border settlements and planned to develop the project at least through 2034.
4. On 26 May, the United Kingdom added “Virtual Assets Issuer” to its sanctions list, accusing the company of conducting business “of economic significance to the government of the Russian Federation.” The UK sanctions document also named USDKG and the USDKG.com website among related entities.
5. Two days later, on 28 May, the issuer was re-registered under the shortened name “EVA.” Kyrgyzstan was included in the sanctions package alongside other crypto structures that the UK linked to the Russian project “A7” and the ruble stablecoin A7A5.

On 1 October, the US Treasury said A7 was a “shadow banking structure” used by Iran to evade sanctions, while OFAC designated A7 a “significant transnational criminal organization.” That is the backdrop now hanging over anything that sits near state-linked crypto rails in this region.