Kyrgyzstan Launches Gold-Backed Stablecoin USDKG to Modernize Cross-Border Payments
On November 20, 2025, Kyrgyzstan officially launched USDKG, a gold-backed stablecoin pegged 1:1 to the US dollar, backed by an initial $50 million reserve. The token is issued on Tron and fully audited by ConsenSys Diligence, with future expansion to Ethereum planned.

The issuer, OJSC Virtual Asset Issuer, is a state-owned enterprise under the Ministry of Finance, operating within the Kyrgyz Republic’s 2022 Virtual Assets Act. This marks Central Asia’s first initiative blending sovereign oversight with blockchain transparency.

The launch ceremony was attended by President Sadyr Japarov, Finance Minister Almaz Baketaev, and Gold Dollar CEO Biibolot Mamytov. 50 million USDKG tokens were issued, each fully backed by physical gold, with operational control (including gold custody) delegated to a locally registered private firm via contract.

This structure ensures USDKG is not a CBDC, but a commodity-backed stablecoin with clear accountability separation. The issuer plans to scale reserves to $500 million, then $2 billion long-term. USDKG complies with FATF KYC/AML standards and targets financial inclusion and cross-border trade efficiency.

The government stresses the project aims to enhance economic transparency—not serve geopolitical agendas—and complements, rather than replaces, the national monetary system.

VECS Commentary
USDKG is a strategically brilliant geopolitical move: a small nation leverages gold as a trust anchor to build an inflation-resistant, transparent, and sovereign payment tool. Notably, its state-backed yet non-CBDC structure grants regulatory flexibility while avoiding centralization critiques. Yet success hinges on: (1) consistent independent third-party audits; (2) real-time on-chain gold reserve transparency; and (3) real-world adoption by SMEs and citizens—not just symbolic sovereignty. If successful, Kyrgyzstan could become a blueprint for developing nations seeking to escape dollar hegemony without sacrificing stability.

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**This news was obtained and summarized from various sources on the internet.