Kyrgyzstan’s authorities decided to terminate the USDKG state-backed stablecoin project. The Cabinet of Ministers ordered the liquidation of the issuing company and its affiliated cryptocurrency platform. It also revoked 6 previous directives governing the project’s implementation.
Under a directive issued by the Cabinet of Ministers, Kyrgyzstan’s Ministry of Finance was instructed to liquidate the legal entities involved in the USDKG gold-backed state stablecoin project. The government cited the need to reduce state participation in commercial enterprises and improve the efficiency of state asset management as the official rationale.
According to a notice published on the project’s official website, USDKG holders can redeem their tokens for fiat currency or the U.S. dollar-pegged stablecoin USDT.
The liquidation of USDKG’s issuing company followed its designation under sanctions by the U.K. Foreign, Commonwealth & Development Office (FCDO). The issuer was wholly state-owned.
The directive also revoked the document approving the roadmap for the Cryptocurrency pilot project, which received government approval in November 2024. The roadmap called for the establishment of a state-owned virtual asset issuer and the use of virtual assets for international settlements. USDKG was subsequently issued as part of the initiative. Several other government directives adopted in 2024 and 2025 were also revoked, including decisions related to transferring the issuer’s shares to the state and engaging a service provider to manage the stablecoin.
The USDKG stablecoin project was first announced in May 2025, with the asset officially issued in November of that year. In May 2026, USDKG became available to professional investors through the over-the-counter (OTC) platform of OSL, a regulated Hong Kong-based exchange, as well as on the decentralized exchanges Curve and Uniswap.
In December 2025, accounting network Kreston Global conducted an independent audit of the project’s gold reserves, confirming the existence of 30 gold bars weighing a combined total of about 376 kg. At the time of writing, USDKG’s issuance totaled 47 million tokens on the TRON blockchain and 3 million tokens on Ethereum.
The decision to liquidate this particular project doesn’t automatically extend to Kyrgyzstan’s other state-backed digital asset initiatives. The country also has KGST, a stablecoin pegged to its national currency.
