Kyrgyzstan launches national stablecoin tied to US dollar and gold reserves

Kyrgyzstan has officially launched its first state-backed stablecoin, USDKG, marking a new stage in the country’s digital finance development.

According to Kyrgyz media, the Ministry of Finance confirmed that the project cost the national budget approximately $5,011.83 million, according to data published on the Open Budget portal.

The asset underwent state registration with the Financial Market Regulation and Supervision Service (Finnadzor) a week before its release. The issuer of USDKG is OJSC “Issuer of Virtual Assets”, a company fully owned by the Ministry of Finance, making the new currency the first state-owned digital asset in the Kyrgyz Republic.

The initiative follows a broader national plan to integrate blockchain technologies and digital finance into the Kyrgyz economy. At the end of October, Binance founder Changpeng Zhao was the first to announce that Kyrgyzstan would launch a national stablecoin, an initiative that was later confirmed by the authorities.

Earlier, President Sadyr Zhaparov had instructed the government to create and test the KGST stablecoin and the digital som, tasks discussed during a meeting of the National Council on the Development of Virtual Assets and Blockchain Technologies, attended by Zhaparov and Zhao.

According to CoinDesk, Kyrgyzstan plans to fully launch USDKG, a stablecoin pegged to the US dollar and backed by gold, in the third quarter of 2025. The project’s advisor, Gabriel Guerra, announced the timeline during the Token2049 conference in Dubai.

Guerra explained that the stablecoin will initially be backed by $500 million in gold supplied by the Kyrgyz Ministry of Finance, with plans to expand the gold reserves to $2 billion over time.

The USDKG will primarily facilitate cross-border transactions, beginning in Central Asia, with future expansion planned into Southeast Asia and the Middle East.

Maintaining a 1:1 peg to the US dollar, USDKG will be re-collateralised with gold to minimise price volatility risks. Holders will be able to redeem the stablecoin for gold, cryptocurrencies, or fiat currency, while independent audits will ensure full transparency of the gold reserves.

By Tamilla Hasanova