Kyrgyzstan has become the first country in the world to officially issue a government-backed stablecoin fully backed by physical gold. The ceremonial launch of the USDKG digital token took place on November 20 with the participation of President Sadyr Japarov, according to the Kyrgyz president’s press service.
The event was also attended by Finance Minister Almaz Baketayev and Biibolot Mamytov, chairman of the state-owned company "Virtual Asset Issuer JSC," which developed and launched the stablecoin under the Ministry of Finance.
During the ceremony, officials symbolically pressed a “Launch Issuance” button to initiate the minting of 50 million USDKG tokens on the Tron blockchain. Each token is pegged to the U.S. dollar and fully backed by physical gold, according to Fergana News.
According to developers, USDKG combines the stability of gold with the transparency and technological benefits of blockchain, positioning it as a reliable and secure digital currency. The Ministry of Finance noted that the issuance is part of a pilot project aimed at advancing the digital economy and strengthening Kyrgyzstan's financial sovereignty.
The stablecoin is expected to serve as the foundation for a national Web3 infrastructure and support the implementation of decentralized solutions across public and private sectors. It also aims to attract investment and promote international technology cooperation.
Project advisor Gabriel Guerra stated that the stablecoin’s primary purpose is to facilitate cross-border payments. The initial gold reserve of $500 million was provided by the Ministry of Finance, with plans to increase it to $2 billion.
Guerra clarified that unlike other tokens such as USDT or PAXG, USDKG is not tied to the fluctuating market price of gold. The token is exchanged at a fixed rate of 1 USDKG = $1, with full gold backing. Holders will be able to convert the token into physical gold, other crypto assets, or fiat currency.
