Kyrgyz Republic Announces Gold-Backed Stablecoin USDKG for Cross-Border Trade

The Kyrgyz Republic is set to launch USDKG, a gold-backed stablecoin pegged 1:1 to the U.S. dollar, in Q3 2025. Backed by $500 million in physical Gold reserves held by the Ministry of Finance, the initiative aims to enhance cross-border payments in Central Asia and facilitate international trade through blockchain technology.

USDKG distinguishes itself from commodity-pegged tokens by maintaining strict dollar parity while allowing redemption for physical gold, crypto assets, or fiat. The government plans to scale reserves to $2 billion, with third-party audits ensuring transparency. The stablecoin will initially target Central Asian trade corridors before expanding to Southeast Asia and the Middle East.

Remittances account for 30% of Kyrgyzstan’s GDP, positioning USDKG as a potential catalyst for economic transformation through streamlined digital payments. The overcollateralized structure addresses gold price volatility, making it suitable for institutional use.