Kyrgyz Republic to Launch USDKG Gold-Backed Stablecoin in 2025

The Kyrgyz Republic has unveiled plans to introduce USDKG, a gold-backed stablecoin pegged to the US dollar, with an anticipated launch in the third quarter of 2025. The stablecoin will be supported by an initial reserve of $500 million in physical gold, managed by the Ministry of Finance, with intentions to expand this reserve to $2 billion in the future.

This initiative is part of a larger strategy to bolster cross-border payment infrastructure in Central Asia and facilitate international trade through blockchain-based financial instruments. USDKG is designed for institutional use and will be overcollateralized to minimize the impact of gold price volatility. Unlike other commodity-pegged tokens, USDKG will maintain a strict 1:1 parity with the US dollar, backed by audited gold reserves. Users will have the option to exchange tokens for physical gold, crypto assets, or fiat currency through the issuance and redemption process.

The government of Kyrgyzstan aims to conduct regular third-party audits to ensure transparency and trust in the asset’s collateral structure. USDKG will initially focus on cross-border transactions and trade within Central Asia, with plans to expand into Southeast Asia and the Middle East. Remittance flows currently constitute approximately 30% of Kyrgyzstan’s GDP, underscoring the potential economic benefits of streamlined digital payments.