Kyrgyzstan Is Debuting a Gold-Backed Stablecoin, USDKG, by the Third Quarter of 2025

Kyrgyzstan is set to debut a gold-backed stablecoin, USDKG, by the third quarter of 2025. Backed by the nation's Ministry of Finance gold reserves and pegged 1:1 to the U.S. dollar

Kyrgyzstan is aiming to launch its own gold-backed stablecoin, USDKG, by the third quarter of 2025. The initiative is part of the government’s broader strategy to improve cross-border payments and trade in Central Asia.

The stablecoin will be backed by a portion of the nation’s gold reserves, currently valued at $500 million, and pegged 1:1 to the U.S. dollar. It will be overcollateralized to help safeguard the dollar peg in the event of large outflows.

The initiative was discussed at the Token2049 conference in Dubai, where Project consultant Gabriel Guerra provided an update on the project.

“We are focused on ensuring transparency and trust can be maintained through regular independent audits of the gold reserves.”

Unlike other gold-related tokens, USDKG will not track the market price of gold. Instead, it will maintain a stable 1:1 value with the U.S. dollar.

The hybrid model positions USDKG uniquely in traditional and digital financial markets, offering price predictability for users engaged in trade and finance while being overcollateralized to mitigate risk.

Initially, the rollout will target Central Asia, a region where remittances make up nearly 30% of Kyrgyzstan’s GDP.

“There is a huge demand for efficient digital financial tools in the region, and we believe that USDKG can play a significant role in simplifying cross-border money transfers for individuals, businesses, and governments.”

Later, the government plans to expand USDKG’s reach to Southeast Asia and the Middle East, both regions with high remittance flows and increasing interest in digital finance.

Recently, Binance signed an agreement with the Kyrgyz Republic to support its transition to a digital economy. The deal was formalized during the first meeting of the Council for the Development of Digital Assets.

The partnership will introduce Binance Pay across Kyrgyzstan to enable safe and seamless crypto payments. It also includes national blockchain education programs and infrastructure development. Binance Academy will collaborate with local institutions to deliver training in decentralized finance (DeFi), smart contracts, and digital governance.

Binance will also support Kyrgyzstan in exploring blockchain applications in public services and in piloting the digital som, the country’s proposed central bank digital currency (CBDC).

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