Kyrgyzstan has entered a new era of digital finance. In Bishkek, officials unveiled USDKG — a new stablecoin backed by physical gold and pegged 1:1 to the US dollar. With an initial issuance of 50 million tokens, the project ranks among the region’s most ambitious state-backed experiments in cryptocurrency.

Gold backing, audit, and links to the traditional economy

USDKG is issued by OJSC Virtual Asset Issuer, a state entity under the Kyrgyz Ministry of Finance. The stablecoin currently operates on the Tron network, with support for Ethereum planned later. Its transparency is strengthened by an audit conducted by Consensys Diligence.

Each token is backed by physical gold held by a private Kyrgyz-registered custodian, which also manages the reserves. This structure separates reserve operations from state issuance and prevents USDKG from being classified as a CBDC. Operator Gold Dollar plans to expand the reserves — first to $500 million and later up to $2 billion.

Strong political backing and strict regulation

President Sadyr Japarov, Finance Minister Almaz Baketayev, and project CEO Biibolot Mamytov attended the launch. By pressing the symbolic “Launch Issuance” button, they signaled that financial digitalization is officially part of national strategy.

USDKG complies with FATF rules, including mandatory KYC/AML checks for redemptions. According to the government, the goal is to boost transparency, support foreign trade, and streamline cross-border payments — without competing with the national currency.

A regulated model that changes the game

Kyrgyzstan is one of the first Central Asian countries with comprehensive legislation for virtual assets. The 2022 Digital Asset Law provides a clear regulatory framework with accountability and oversight.

The stablecoin stands in contrast to offshore-issued projects or algorithmic stablecoins lacking hard backing. USDKG combines physical reserves with transparent on-chain verification — a model aligned with rising demand for asset-backed digital instruments.

A bridge between blockchain and the traditional financial system

The project aims to modernize the country’s economy, speeding up settlements, cross-border payments, and access to financial services. With USDKG, Kyrgyzstan positions itself as a regional innovator blending traditional value (gold) with modern technology (blockchain).

USDKG is the region’s first state-backed, gold-backed stablecoin. If the planned reserve expansion succeeds, it could become one of the most significant asset-backed tokens in today’s market — and a potential blueprint for emerging economies.

Sources:

https://x.com/USDKG_Official/status/1991506826601648525

https://president.kg/ru/news/21/39826