Kyrgyzstan Launches Gold-Backed Stablecoin USDKG
Kyrgyzstan has introduced its national stablecoin, USDKG, with an initial value of $50 million. The coin launched officially on November 6. It is pegged 1:1 to the US dollar but backed fully by the country’s physical gold reserves.
Features and Purpose of USDKG
The Ministry of Finance, alongside the State Service for Regulation and Supervision of the Financial Market, calls USDKG the world’s first state-backed, gold-collateralized stablecoin. The goal is to modernize Kyrgyzstan’s financial system with a secure, transparent digital asset.
While USDKG’s price matches the US dollar, its intrinsic value relies on audited national gold stored under state control. The coin aims to enhance the nation’s digital economy and financial sovereignty.
Economic Impact and Future Plans
Remittances from Kyrgyzstani workers abroad make up about 30% of the country’s GDP. These funds currently face high transaction fees. USDKG is intended to reduce costs, increase financial access, and promote cross-border trade.
The Ministry of Finance plans to list USDKG on centralized and decentralized exchanges to enable global circulation. Initial backing gold reserves fall between $300 million and $500 million, with aims to grow to $2 billion. Regular third-party audits will verify that USDKG remains fully collateralized.
Kyrgyzstan sees USDKG as a step toward becoming a financial innovation hub in Central Asia. The government confirms USDKG is separate from the proposed national stablecoin KGST, pegged to the Kyrgyz som, and from any central bank digital currency (CBDC) plans.
