Kyrgyzstan Launches $50M Gold-backed USDKG Stablecoin to Modernize Cross-border Payments

USDKG
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The issuer, OJSC Virtual Asset Issuer, is a state-owned entity under the Ministry of Finance, operating within the legal framework established by the 2022 Law on Virtual Assets of the Kyrgyz Republic. The initiative represents a first-of-its-kind model in Central Asia, merging sovereign oversight with blockchain transparency.

The launch ceremony was attended by Sadyr Japarov, President of the Kyrgyz Republic, Almaz Baketaev, Minister of Finance, and Biibolot Mamytov, CEO of Gold (Goldkurs) Dollar, the project's operator. During the event, the dignitaries pressed a symbolic "Launch Issuance" button, officially initiating the circulation of USDKG tokens.

The issuance of USDKG is carried out by a company with 100% state participation, ensuring a high level of investor trust and institutional reliability. A total (Total Aktie) of 50,000,000 USDKG tokens have been issued, each fully backed by physical gold reserves. Operational control - including gold management - is delegated to a private company registered in the Kyrgyz Republic, under a contractual agreement with the USDKG issuer.

This separation of responsibilities ensures independent operational oversight and positions USDKG outside the classification of a Central Bank Digital Currency (CBDC). The company responsible for managing USDKG's gold reserves, has outlined plans to expand the backing to $500 million in the next (Next Aktie) phase, with a long-term target (Target Aktie) of $2 billion.

The stablecoin is fully compliant with FATF KYC/AML standards, and redemptions require standard identity verification. It is designed to facilitate financial inclusion.

Kyrgyzstan is among the first nations in the region to establish a comprehensive digital-asset regulatory framework, setting a precedent for state-supervised virtual currencies. Government representatives emphasized that such initiatives aim to enhance economic transparency and trade efficiency, rather than serve any geopolitical agenda. Officials also noted that USDKG complements, rather than competes with, the national monetary system.

The project reframes traditional narratives around state-issued and commodity-backed digital assets. Its gold collateral serves as a verifiable, inflation-resistant foundation, aligning with a growing market preference for transparent, real-asset-backed stablecoins. By combining physical reserves with on-chain verification, USDKG introduces a model of measurable stability uncommon in the current stablecoin landscape. The state-backed structure provides a clear regulatory framework built on accountability and public oversight.

The Kyrgyz initiative underscores a broader trend toward responsible digital-asset innovation in emerging markets. The government's focus on regulatory discipline, transparency, and tangible reserves signals a pragmatic approach to blockchain-based modernization.

With USDKG, Kyrgyzstan positions itself as a regional first-mover in regulated asset-backed digital currencies - both bridging traditional finance and blockchain infrastructure and maintaining full sovereign oversight.

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