TechFlow, May 5 — According to CoinDesk, Kyrgyzstan plans to launch USDKG, a gold-backed stablecoin pegged 1:1 to the U.S. dollar, in the third quarter. Gabriel Guerra, an advisor on the project, revealed at the Token2049 conference in Dubai that USDKG will be backed by $500 million worth of gold reserves provided by the Ministry of Finance of Kyrgyzstan.
The country's Ministry of Finance intends to expand its gold reserves to $2 billion and will conduct independent audits to ensure trustworthiness and transparency of the collateral. Guerra stated that USDKG will use an over-collateralization mechanism and will primarily be used for cross-border fund transfers. Notably, USDKG holders will be able to redeem their stablecoins for physical gold, other crypto assets, or fiat currencies.
