- Kyrgyzstan will use USDKG, a gold-backed stubcoin, as its fiat currency to help modernize its finances.
- The country has seen a 30% increase in crypto mining tax revenue in the first quarter of 2025, strengthening sector growth.
Kyrgyzstan has announced plans to adopt gold-backed Stablecoin USDKG as its fiat currency. The government is not only testing it, but really aims to make this project a part of people's daily lives. Imagine one day people can buy hot tea at OSH or pay for public transport in Bishkek.
Cyrgyzstan-backed Stablecoin usdkg is fixed in the US dollar and supported by audited gold reserves, ensuring transaction stability and https://m9yf1oslma pic.twitter.com/gtb22icj90i
– Body News (@telo_official) May 30, 2025
Why Kyrgyzstan is doubling its digital and gold-favoured currency
USDKG itself is not a regular token. Each unit is stored in a verified storage location and is fully backed by physical gold that is regularly audited. At the first launch, the amount of gold reserved will reach $500 million, and is said to continue to increase to $2 billion over the next two years.
Previously, Kyrgyzstan's President Sadir Japarov had signed a law that would legalize the digital version of the national currency, the digital SOM.
Kyrgyzstan's central bank will ultimately control the development of its payment platform, but its launch will be seriously considered from 2026. So there are two paths. One is held by the state, and the other is displayed through a gold-based Stablecoin.
Meanwhile, CNF previously reported that Binance is also approaching the country. They signed the Kyrgyz government and expanded the adoption of encryption and introduced blockchain education through Binance Pay and Binance Academy. It is clear that the country is not only obsessed with projects, but is also serious about building digital infrastructure from many different aspects.
The driving force behind the use of USDKG
Additionally, some local economies are beginning to be affected. In the first quarter of 2025, tax revenue from the crypto mining sector reached SOM 2987 million. This is over 30% compared to last year.
What does that mean? Activities in this field are becoming more active. There are currently 10 officially registered mining companies in the country. This is not a virtual world far from real life. This touched on the state Department of Treasury.
Returning to using USDKG, natural questions arise. Why did Kyrgyzstan choose gold-based stables rather than creating its own cryptocurrency? The answer may be stability.
Market turbulence allows regular cryptography to go up and down like a roller coaster. However, with gold support and fixed value in the US dollar, the USDKG still gives more confidence to citizens who may hesitate. It's like having a digital version of Gold Piggy Bank, but you can use it to shop online and pay for services.
