Latest news with #USDKG
See - Sada Elbalad
4 days ago
- Business
- See - Sada Elbalad
Warnings of a Global Gold Rush Amid Escalating US Trade Tensions
Waleed Farouk As US President Donald Trump escalates trade pressure by announcing his intention to impose new 50% tariffs on European imports, a US think tank has warned that these policies could push several countries—particularly emerging markets—to adopt gold as an alternative to the dollar in the global financial system. According to an opinion piece published by Kimberly Donovan, director of the Economic State Initiative at the Atlantic Council, and Maya Nikoladze, deputy director, many countries have already begun to seek safe alternatives outside the dominance of the dollar, with gold at the forefront of these alternatives, whether through physical reserves or digital instruments backed by the precious metal. "Many countries, including US adversaries, are now using gold to circumvent US sanctions and finance activities that threaten US national security," the article states. Unprecedented Rise in Central Bank Gold Purchases The authors noted that central banks around the world continue to boost their gold reserves. Data from the World Gold Council showed that purchases during the first quarter of 2025 reached 243.7 tons, a 24% increase over the average of the past five years, despite a slowdown compared to the peak of purchases in 2022. Russia is a prominent example of this trend. The Russian Ministry of Finance is believed to be purchasing gold from domestic producers in an undisclosed manner to bolster its reserves. Gold is also used in informal trade with countries such as the UAE and Turkey, according to the report. Gold-Backed Digital Innovations: Cryptocurrencies Enter the Game The issue is no longer limited to gold reserves alone. Recent trends have emerged regarding the use of gold to create stablecoins. This month, the Ministry of Finance of Kyrgyzstan announced plans to launch a gold-backed stablecoin, USDKG, in the third quarter of 2025. The USDKG will be fully backed by gold reserves worth $500 million, with a goal of reaching $2 billion. Holders of the currency will be able to exchange it for gold, cryptocurrencies, or fiat currencies, enhancing the ability of this small country—where foreign remittances account for a third of its GDP—to conduct cross-border transactions without going through the US financial system. US Concerns Over Loss of Control Over the Global Financial System The report warns that gold-backed digital currencies—especially in countries subject to sanctions, such as Russia, or those with which it has financial ties—could be used as tools to evade Western sanctions, given the lack of US oversight. The report stated that Russian interest in the USDKG system in particular could be a means of accessing technologies subject to Western restrictions, through an alternative financial system that does not pass through the dollar or US banks. A Call to Rethink US Economic Policies In concluding the analysis, the authors urged the US administration to move away from punitive policies that push countries to seek alternatives to the dollar, particularly gold, and called for strengthening financial stability by supporting economically weak countries and expanding trade and investment ties with them. read more CBE: Deposits in Local Currency Hit EGP 5.25 Trillion Morocco Plans to Spend $1 Billion to Mitigate Drought Effect Gov't Approves Final Version of State Ownership Policy Document Egypt's Economy Expected to Grow 5% by the end of 2022/23- Minister Qatar Agrees to Supply Germany with LNG for 15 Years Business Oil Prices Descend amid Anticipation of Additional US Strategic Petroleum Reserves Business Suez Canal Records $704 Million, Historically Highest Monthly Revenue Business Egypt's Stock Exchange Earns EGP 4.9 Billion on Tuesday Business Wheat delivery season commences on April 15 News Egypt confirms denial of airspace access to US B-52 bombers News Ayat Khaddoura's Final Video Captures Bombardment of Beit Lahia News Australia Fines Telegram $600,000 Over Terrorism, Child Abuse Content Arts & Culture Nicole Kidman and Keith Urban's $4.7M LA Home Burglarized Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Sports Neymar Announced for Brazil's Preliminary List for 2026 FIFA World Cup Qualifiers News Prime Minister Moustafa Madbouly Inaugurates Two Indian Companies Arts & Culture New Archaeological Discovery from 26th Dynasty Uncovered in Karnak Temple Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies
Coin Geek
15-05-2025
- Business
- Coin Geek
Kyrgyzstan to launch gold-backed stablecoin in Q3
Getting your Trinity Audio player ready... The central Asian nation of Kyrgyzstan intends to launch its new stablecoin later this year, one of the officials involved in its development has revealed. The Kyrgyz government has been developing the USDKG stablecoin for months now as a solution to its financial inclusion and remittance challenges. At a recent digital asset event in Dubai, one of the project's advisors revealed that the stablecoin is set to debut in Q3. USDKG will be backed by $500 million worth of gold at launch, which the government intends to expand to $2 billion. To account for any swings in the price of gold— which has gained 25%, or $650 this year—Kyrgyzstan will overcollateralize the stablecoin. The government also intends to conduct regular independent audits to maintain trust in the currency. The new stablecoin will primarily target remittances, which play a prominent role in the country's economy. In 2024, Kyrgyzstan received $3 billion in remittances, with Russia at $2.7 billion dominating the sector. Kyrgyz residents paid an average of 8% in fees to receive the remittances (banks charge as much as 12%), higher than the global average of 6.6% and nearly thrice the UN-recommended 3%. The Kyrgyz government believes that a national stablecoin can reduce the costs, increase access and reduce the complexities involved in the process. The USDKG has taken precedence over the digital som, the country's CBDC. Last year, the country's central bank revealed that it had developed a demo version of the digital som and a few months later, proposed legal amendments that would pave the way for the CBDC's launch. Since then, it has not revealed any new developments on that front. ECB launches innovation hub to test digital euro use cases Elsewhere, the European Central Bank (ECB) has launched an innovation hub to test innovative use cases of its prospective digital euro. The ECB first announced the initiative last October, inviting European financial industry stakeholders to submit applications by November 29. The regional bank has now selected 70 participants for the four-month hub, ranging from fintechs and banks to tech firms and academia. Surprisingly, only four banks—CaixaBank (NASDAQ: CIXPF), Berenberg, Erste Group (NASDAQ: EBKOF) and Bank of Cyprus (NASDAQ: BKCYF)—joined the initiative. Other participants include German semiconductor giant Infineon and subsidiaries of software giant SAP, Tata Consultancy, KPMG and Accenture (NASDAQ: ACN). 'We welcome the huge amount of interest that market participants have shown in this exciting initiative,' commented Piero Cipollone, an ECB executive board member. The platform will have two distinct workstreams: pioneers and visionaries. Under the pioneers' workstream, participants will limit their exploration to conditional payments and how the ECB can best develop technical standards to support them. This workstream has 45 participants, including three of the four participating banks. Companies in the visionaries workstream will focus on the bigger picture, including how the digital euro can solve societal challenges such as financial inclusion. They will organize workshops with the ECB to discuss how the central bank digital currency (CBDC) can be more accessible, easier to use and integrate into existing payment rails. Visionaries will include the Italian university Politecnico di Milano, Erste Group Bank, German savings banks association DSGV and blockchain firm Exyond. A few participants, like Tata Consultancy, German fintech firm PoMo Service and Spanish mobile payments service BIZUM, will be involved in both workstreams. 'The breadth and creativity of the proposals highlights the digital euro's potential as a catalyst for financial innovation in Europe, including the development of new solutions that further enhance the payment experience for Europeans and create market [opportunities],' Cipollone stated. The ECB will publish a report with findings from both workstreams later this year. The new initiative is the latest in the ECB's ongoing two-year CBDC preparations, which end later this year. While the regulator is committed to the project, the digital euro's fate lies in the hands of European legislators, who must pass new legislation that paves the way for the CBDC. Speaking to one outlet recently, a spokesperson for the regional bank noted that CBDC legislation 'is still under discussion and we won't take a decision on issuing the digital euro before that process is complete.' The latest initiative comes as CBDC interest globally has cooled down after a scramble that was sparked by Western fear that China's digital yuan would take over. However, since then, countries like the U.S. have rejected CBDCs, while others like Canada have stated that they are focusing on other, more critical financial innovations. Watch: Finding ways to use CBDC outside of digital currencies title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Arabian Post
05-05-2025
- Business
- Arabian Post
Kyrgyzstan Unveils Gold-Backed Digital Currency to Modernise Financial Landscape
Kyrgyzstan is set to launch a gold-backed stablecoin, the Gold Dollar , in the third quarter of 2025. The initiative, spearheaded by the Ministry of Finance, aims to integrate blockchain technology into the national financial system, offering a transparent and stable digital asset backed by $500 million in gold reserves. Plans are underway to increase this backing to $2 billion within two years. Unlike central bank digital currencies , USDKG operates within a privately managed smart contract ecosystem, ensuring security and transparency without central bank control. The stablecoin is pegged 1:1 to the U.S. dollar and will initially launch on the Ethereum blockchain, with intentions to expand to other chains as adoption grows. USDKG is designed to facilitate cross-border payments, a significant feature for Kyrgyzstan, where remittances account for approximately 30% of the country's GDP. The stablecoin enables instant, low-cost international transactions, making it easier for workers abroad to send money home. Transparency is a cornerstone of USDKG's design. Each token is verifiably tied to physical gold stored in secure, audited vaults. A publicly accessible proof-of-reserves system will be available, allowing real-time verification of gold reserves and stablecoin issuance on the blockchain. The Kyrgyz government has also proposed legislation to establish licensed crypto banks, aiming to provide regulated banking services related to digital assets and cryptocurrencies. This move is intended to legalize and regulate the cryptocurrency market, increase trust in crypto assets, and mitigate risks of fraud and unauthorized access to funds. In addition to USDKG, the National Bank of the Kyrgyz Republic plans to launch a digital national currency, the digital som, by the end of 2026. The digital som will coexist with traditional cash and non-cash currencies, facilitating cashless transactions and improving control over budget spending. Arabian Post – Crypto News Network
