The Kyrgyz Republic has announced the launch of USDKG, a gold-backed stablecoin pegged 1:1 to the U.S. dollar. The stablecoin is expected to go live in the Q3 of 2025 and will be backed by $300 million worth of physical gold. It will be issued with the approval of the Ministry of Finance and supported by private gold purchases from the National Bank of the Kyrgyz Republic.
USDKG is part of an initiative to improve cross-border payments and support trade across Central Asia using blockchain-based tools.
Although backed by gold, USDKG is not designed to follow gold’s market price. Instead, it will maintain a fixed value of one U.S. dollar, with reserves regularly audited to confirm backing. Institutions will be able to redeem USDKG for physical gold, fiat currency, or crypto assets.
The Kyrgyz government aims to expand the program to support up to $2 billion in gold reserves. Independent audits by one of the Big Four accounting firms are planned to ensure transparency and credibility.
Initially, USDKG will be used for cross-border trade and payments in Central Asia, but the infrastructure is being developed for future global integration. The stablecoin will offer holders the option to redeem tokens in gold, digital assets, or fiat, combining asset-backed stability with flexible transaction options.
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