The government of Kyrgyzstan has initiated the liquidation of the state-backed stablecoin USDKG. Holders are currently being offered the option to exchange their tokens for fiat currency or USDT. The decision follows a government directive issued on August 20, aimed at optimizing state asset management and participation in commercial entities.
The Ministry of Finance has been tasked with liquidating the issuer, OJSC Virtual Asset Issuer, and the state-owned crypto exchange Coin Nomad Exchange. The latter began voluntary liquidation on September 3. Despite reporting a net profit of KGS 1.47 million in the first half of 2026, the exchange's core operations remained loss-making.
At the time of the shutdown, 50 million USDKG tokens were in circulation, with 47 million on the TRON network and 3 million on Ethereum. An audit by Kreston Global in December 2025 confirmed reserves of 30 gold bars weighing approximately 376 kg. The project was officially launched in November 2025 with an initial issuance of 50 million tokens.
The liquidation follows the inclusion of the issuer in the UK sanctions list on May 26, 2026, over alleged ties to Russian economic activities. Despite the closure of USDKG, Kyrgyzstan continues to support other crypto initiatives, including the KGST stablecoin. Additionally, the National Bank is tasked with developing a digital som platform by December 31, 2026.
