Kyrgyzstan to Launch Gold-Backed Stablecoin USDKG

Kyrgyzstan has announced the launch of the gold-backed stablecoin USDKG in the third quarter of 2025. This was revealed by project advisor Gabriel Guerra at the Token2049 conference, reports CoinDesk.  

The coin will be pegged to the US dollar at a 1:1 ratio and backed by Kyrgyzstan’s Ministry of Finance’s gold reserves worth $500 million. However, Guerra noted that the reserves are planned to be increased to $2 billion.

USDKG is intended for cross-border payments and international trade. Initially, the project will launch in Central Asia, with plans to expand to the Middle East and Southeast Asia. 

According to Guerra, the stablecoin will address the issue of remittances, which account for 30% of the country’s GDP.

To reduce gold volatility, USDKG will be issued with over-collateralization. Independent auditors will be hired to ensure transparency.

Unlike PAXG or USDT, USDKG does not track the price of gold—the coin is directly convertible to dollars. Users will be able to exchange stablecoins for physical gold, fiat, or crypto assets.

Meanwhile, Binance founder Changpeng Zhao (CZ) proposed to Kyrgyzstan’s President Sadyr Japarov to include Bitcoin and BNB in the national crypto reserve.

Not my car, but ❤️ the plate. Kyrgyzstan???

Among other things, also gave my advice to make #BNB and #BTC as the two starting crypto for the National Crypto Reserve. https://t.co/ZhbGs2pWQu pic.twitter.com/ZewpPqZdQc

— CZ ? BNB (@cz_binance) May 5, 2025

Back in April, CZ became an advisor to the Kyrgyz government on cryptocurrency and blockchain matters.