Kyrgyzstan Launches State-Supervised Gold-Backed Stablecoin USDKG

Kyrgyzstan has officially introduced USDKG, a gold-backed stablecoin pegged 1:1 to the U.S. dollar, with an initial issuance valued at $50 million. The token is issued on the Tron blockchain and has been audited by ConsenSys Diligence, with plans to expand compatibility to Ethereum in the future.

The issuer, OJSC Virtual Asset Issuer, is a state-owned entity operating under the Ministry of Finance, adhering to the legal framework of the 2022 Law on Virtual Assets. While the issuer is fully state-owned, operational control and the management of the physical gold reserves backing the token are delegated to a private company under a contractual agreement. This structure distinguishes USDKG from a Central Bank Digital Currency (CBDC).

The launch event was attended by high-ranking officials, including President Sadyr Japarov and Minister of Finance Almaz Baketaev. Government representatives noted that the initiative is designed to complement the national monetary system and enhance trade efficiency.

"The issuance of USDKG is carried out by a company with 100% state participation, ensuring a high level of investor trust and institutional reliability," the announcement stated.

The project plans to scale its backing to $500 million in the next phase, with a long-term target of $2 billion. The stablecoin adheres to FATF standards for KYC and AML compliance, requiring identity verification for redemptions.