Kyrgyzstan's government has ordered the liquidation of its gold-backed state stablecoin, Gold Dollar (USDKG), along with the company that issued it and the exchange platform built to trade it. The decision follows accusations that the project was used to help evade international sanctions, and comes weeks after the United Kingdom placed the issuer on its sanctions list.
The cabinet has instructed the Ministry of Finance to close both the issuing company, EVA, and the state digital asset exchange platform Coin Nomad Exchange. Token holders will be able to redeem their USDKG for either fiat currency or USDT. The government described the move as part of the "optimization of state participation in companies and improvement of the efficiency of state asset management."
USDKG was built on the Tron network and pegged 1:1 to the US dollar, with reserves intended to be backed by physical gold. The project had originally targeted up to 500 million dollars in gold reserves, though just over 50 million tokens were ultimately issued. In May, the stablecoin was listed on OSL, a regulated digital asset platform in Hong Kong, as part of a broader ecosystem the government had planned to develop through 2034. The Ministry of Finance was the sole founder of EVA.
Sanctions and a renaming
The United Kingdom added EVA to its sanctions list on May 26. Two days later, the company was re-registered under a shortened name. British authorities linked the Kyrgyz structures to A7, a Russian project behind the ruble-pegged stablecoin A7A5, which Moscow launched in February 2025. London described the entities involved as "of economic significance for the government of the Russian Federation."
The UK sanctions followed scrutiny from Washington. The US Treasury Department declared the A7 structure a shadow banking system on October 1, alleging it had been used by Iran to evade sanctions. The Office of Foreign Assets Control went further, formally classifying A7 as a transnational criminal organization.
Kyrgyzstan's other crypto ambitions
The closure of USDKG does not mark Kyrgyzstan's exit from digital assets. The country created a separate stablecoin pegged to its national currency, KGST, earlier in 2025. Binance founder Changpeng Zhao had also supported the development of a national reserve for Kyrgyzstan, part of a broader effort by Bishkek to position itself as a regional hub for state-backed crypto projects.
For now, that ambition has been checked by the sanctions regime surrounding Russia. USDKG's unwinding illustrates how closely a small state's crypto initiative can become entangled with geopolitics once foreign authorities draw a line between its structures and sanctioned networks abroad.
