Kyrgyzstan’s USDKG Stablecoin, Pegged to the Dollar and Backed by Gold, Expected to Debut in Q3.

Kyrgyzstan is preparing to launch USDKG, a gold-backed stablecoin pegged to the U.S. dollar, by the third quarter of 2025. The announcement was made by Gabriel Guerra, a key advisor to the project, at the Token2049 conference in Dubai.

The new stablecoin will be fully collateralized by gold reserves, with an initial $500 million in backing from the Kyrgyz Ministry of Finance. Over time, the project aims to increase this reserve to $2 billion, aiming to provide stability and transparency for digital currency transactions in the region.

This move comes as part of Kyrgyzstan’s strategy to facilitate more efficient cross-border payments, particularly in Central Asia, where remittances play a critical role in the economy. By backing USDKG with gold, the government hopes to offer a more stable and trustworthy alternative to existing cryptocurrencies, which can often face volatility.

Guerra highlighted that independent audits will be conducted regularly to ensure the reserves match the volume of issued USDKG tokens. Although the stablecoin will be pegged to the U.S. dollar, its backing by gold will differentiate it from other similar coins in the market, offering a hedge against inflation and currency fluctuations.

The USDKG stablecoin is expected to be used for a variety of purposes, including cross-border transactions and remittances. It will allow users to convert their coins into gold, cryptocurrencies, or fiat, ensuring flexibility for those looking for more diverse investment options in the digital space.

Kyrgyzstan’s entry into the gold-backed stablecoin market positions the country as a forward-thinking player in digital finance, catering to the growing demand for stable and secure assets in the digital economy.