Kyrgyzstan's USDKG Gold-Backed Stablecoin, Which Will Be Pegged to the Dollar, Plans to Launch in Q3
The stablecoin will be backed by $500 million in gold reserves from the Kyrgyz Ministry of Finance, with the intention of increasing the reserves to $2 billion.
Omkar Godbole | Edited by Parikshit Mishra , May 5, 2025, 6:39 AM.
What you need to know:
- Kyrgyzstan is set to launch the Dollar Gold Coin (USDKG) in the third quarter, a stablecoin backed by gold assets and pegged to the US dollar.
- The stablecoin will be backed by $500 million in gold reserves from the Kyrgyz Ministry of Finance, with plans to increase the reserves to $2 billion.
- USDKG is designed for international transactions and trade, initially focusing on Central Asia, with subsequent expansion into Southeast Asia and the Middle East.
The Central Asian republic of Kyrgyzstan plans to introduce the gold dollar (USDKG), a stablecoin backed by gold assets at a 1:1 ratio to the US dollar, in the third quarter, project consultant Gabriel Guerra told CoinDesk at the Token2049 conference in Dubai.
A stablecoin backed by $500 million in gold from Kyrgyzstan's Finance Ministry aims to facilitate cross-border transactions in a country where remittances account for 30% of GDP.
The ministry plans to increase gold reserves to $2 billion, with subsequent independent audits to ensure the credibility and transparency of collateral.
Gold has long been considered a highly liquid and risk-free store of value. However, its periodic price fluctuations may pose a potential risk to the stability of the stablecoin.
To minimize this risk, the stablecoin will be overcollateralized, Guerra noted, adding that its main purpose will be to move capital across borders.
“The stablecoin will be used in international transactions and trade, initially focusing on Central Asia, with subsequent expansion to Southeast Asia and the Middle East,” Guerra said.
Please note that USDKG is not intended to track gold prices like USDT or PAXG. Instead, it will be backed solely by gold reserves and issued and redeemed on a 1:1 basis with the US dollar, maintaining a stable value directly tied to a global reserve fiat currency widely used in international trade.
USDKG holders will be able to exchange their stablecoins for physical gold and other crypto assets or withdraw them as fiat currency.
