- Kyrgyzstan’s Ministry of Finance is backing the stablecoin with $500M in physical gold reserves.
- USDKG blends gold’s security with blockchain efficiency, challenging fiat-backed stablecoins in global finance.
The Kyrgyz Republic plans the launch of USDKG, a gold-backed stablecoin pegged 1:1 to the U.S. dollar, in the third quarter of 2025. Backed by $500 million in physical gold held by the Ministry of Finance, the move aims to strengthen cross-border payments and enhance international trade in Central Asia.
Unlike commodity tokens, the USDKG maintains a dollar parity while being overcollateralized with audited gold reserves. Launching the stablecoin means that institutional users can exchange USDKG tokens for cryptocurrencies, physical gold, or fiat currency.
The Kyrgyz government plans to expand gold reserves from $500 million to $2 billion, with transparency ensured via third-party audits by major accounting firms. While USDKG was initially focused on regional trade and payments, its architecture supports future global integration across decentralized and institutional finance.
William Campbell, Advisory lead of Gold Dollar (USDKG), said in a statement, “Gold is reliable, but it’s not practical for daily transactions. We chose the U.S dollar peg because global commerce runs on it. USDKG brings the security of gold of the stability of the dollar.”
His statement underscores the stablecoin’s aim to offer holders flexibility, trust, and security through tangible gold backing.
See Related: Top Russian Bank Issues First Gold-Backed DFAs With Major Metal Processor
Could Kyrgyzstan’s USDKG Disrupt Crypto And Dollar Dominance?
According to Gabriel Guerra, a co-project adviser, Kyrgyzstan’s launch of USDKG puts the nation at the forefront of financial innovation.
The stablecoin is expected to bring a unique blend of traditional asset security and blockchain efficiency, making it a reliable tool for cross-border financial transactions. The move also challenges the dominance of fiat-backed stablecoins such as USDC and USDT by introducing a tangible asset-backed alternative.
