The middle country Kyrgyzstan plans to debut the gold dollar, or USDKG, the gold-supported Stablecoin peg peg 1: 1 with the US dollar in the third quarter, project advisor Gabriel Guerra told CoinDesk at the token2049 conference in Dubai.
Stablecoin, supported by $ 500 million in gold from the Kyrgyz Ministry of Finance, is designed to facilitate the seamless cross-border transfer to a country where remittances cost 30% of GDP.
The ministry aims to expand gold reserves up to $ 2 billion, with independent audits planned to ensure confidence and transparency in collateral backbone.
Gold has long been considered a high liquid, no risk of value store. However, occasional price swings bring a potential risk to stablecoin stability.
To reduce this, Stablecoin can be overcollateralized, Guerra said, adding that the main case of its use is the transfer of capital to the borders.
“Stablecoin will be used in cross-border transactions and international trade with the initial focus in Central Asia and expansion in Southeast Asia and the Middle East planned for later,” Guerra said.
Note that USDKG is not intended to monitor gold prices such as USDT or PAXG. Instead, it is able to back through gold reserves and is issued and redeemed at a 1: 1 basis with USD, which maintains a stable value tied directly to the global Fiat Currency reserves widely used in international trade.
USDKG holders can redeem their stablecoins for physical gold and other crypto assets or revoke them as Fiat Currency.
