Kyrgyzstan has terminated its national USDKG stablecoin project and ordered the liquidation of its issuer, EVA, and Coin Nomad Exchange, according to Wu Blockchain’s weekly Asia report. Launched in November 2025, USDKG was presented as a state-issued token backed by physical gold, pegged one-to-one to the US dollar and intended mainly for cross-border settlement. The report said holders may redeem tokens for fiat currency or USDT.
The decision leads a broader set of regional developments involving stablecoins, oversight and blockchain settlement. Kyrgyz officials said the shutdown was intended to optimize state-owned asset management. The report also noted that the United Kingdom added USDKG’s issuer to its sanctions list in May 2026 over suspected support for the Russian government through economically significant activity. The policy shift extends a regulatory pattern examined in BTC-Pulse’s Asia Crypto Roundup: Stablecoin Safeguards and On-Chain Settlement.
South Korea broadens cross-border transfer oversight
South Korea’s Ministry of Economy and Finance opened a public consultation on October 7 on amendments to the enforcement decree of the Foreign Exchange Transactions Act. The proposal would bring overseas virtual-asset transfers conducted through custody, management or intermediary services within the scope of regulated transfer services. It would also cover relevant transfers between South Korean virtual-asset service providers and personal wallets.
Operators would have to register in advance, maintain computerized facilities and employ at least two professional staff members. Transfer records would be submitted through the Bank of Korea’s foreign-exchange computer network and could be shared with tax, customs, financial-supervision and financial-intelligence agencies. This emphasis on reporting and enforcement parallels the monitoring theme in Japan Deploys KSK2 to Catch Undeclared Crypto Assets.
Stablecoins move from issuance to settlement infrastructure
Elsewhere in the region, nine Japanese institutions completed the second phase of Project Trinity. The participants, including Sumitomo Mitsui Banking Corporation, Daiwa Securities, SBI Securities, Progmat and Datachain, tested delivery-versus-payment settlement designed to reduce timing mismatches. The trial used security-token corporate bonds and trust-type stablecoins in two synchronized cross-chain settlements, validating the feasibility of a T+2 cycle at this stage.
Hong Kong and Malaysia also agreed to establish a policy-level working group for compliant cross-border stablecoin applications. Their plans include greater exchanges on tokenization and digital currencies, stronger links between their real-time gross settlement systems, and exploration of connectivity between Hong Kong’s Central Moneymarkets Unit and Malaysia’s RENTAS securities depository. These steps add concrete settlement projects to the regulatory picture discussed in Asia Crypto Roundup: Tokenization Rules Take Shape.
Thailand limits the first phase of crypto ETFs
Thailand’s Securities and Exchange Commission announced 11 rules for cryptocurrency ETFs, effective October 16. Initially, eligible funds may invest only in Bitcoin and Ethereum, must trade on the Stock Exchange of Thailand and use passive strategies. A fund’s average annual net exposure to one crypto asset must be at least 80% of net assets, with holdings kept by regulated digital-asset custodians.
The rules allow mutual funds and private equity funds to invest in domestic Thai crypto ETFs, while barring securities firms from financing purchases. Retail investors are temporarily unable to access overseas crypto ETFs through Thai securities brokers. Together with Kyrgyzstan’s project closure and South Korea’s proposed reporting framework, the measures show governments addressing distinct parts of the market: token issuance, cross-border transfers, settlement systems and regulated investment products.
