Kyrgyzstan is on track to launch USDKG, a new gold-backed stablecoin pegged to the U.S. dollar, with a planned debut in the third quarter of 2025. The announcement was made by Gabriel Guerra, a key advisor to the project, during the Token2049 event in Dubai.

The USDKG stablecoin will be supported by an initial $500 million in gold reserves, with plans to expand to $2 billion in the coming years. The Kyrgyz Ministry of Finance will oversee the reserves, ensuring full backing for the stablecoin, and independent audits will be conducted to maintain transparency and trust.

The move comes as Kyrgyzstan looks to address inefficiencies in cross-border payments, particularly in Central Asia, where remittances are a vital component of the economy. By backing the stablecoin with gold, the government aims to provide a more stable, secure, and inflation-resistant option for digital transactions.

The USDKG stablecoin will allow users to convert their holdings into gold, cryptocurrencies, or fiat currency, offering flexibility for international transactions and remittances. Unlike other stablecoins, USDKG will not track the price of gold but will maintain its 1:1 peg to the U.S. dollar, ensuring stability for users.

This launch is a significant step for Kyrgyzstan as it seeks to position itself as a hub for digital finance in Central Asia. The project will initially target regional markets and expand to Southeast Asia and the Middle East, where the demand for secure and efficient digital payment solutions is growing.