Dollar, Kyrgyzstan, Gold, Stablecoin, Web3

Kyrgyzstan is a rising star in the cryptocurrency space. The Central Asian country clarified regulations about the industry, introduced tax rebates for companies operating in the space and even created a national Web3 strategy.

As one of the key initiatives in Kyrgyzstan’s digital vision, USDKG embodies this strategy — a stablecoin project that the government is directly involved in.

In this interview, William Campbell, advisory lead at USDKG, joins Cointelegraph to shed light on what sets USDKG apart and Kyrgyzstan’s evolving Web3 landscape.

Cointelegraph: How is USDKG different from other stablecoins?

William Campbell: It’s different from many of the gold stablecoins out there, because when most people hear “gold-backed,” they often assume it follows the price of gold, but in fact, we want something that could be used in daily life and daily money transfers but has the stability of gold, so we’re pegged to the US dollar. It goes up, we go up, 1:1. But we’re backed by real gold reserves that sit in the vault, that people can trust, that are audited.

So it makes a slight difference, because very few projects in the world — at least big ones that I know of — do that, and then having the trust of a government level entity. saying “We endorse this project and we back it,” is the next level of trust.

CT: Why did you decide to peg your stablecoin to the value of the dollar instead of gold?

WC: I feel like when you get gold, it's true; it's a stable value, but it is something that you speculate about. I'm not going to trade gold in my day-to-day life. I'm not going to go and buy coffee with gold, even if it's digital, because the price goes up and down. If you want something for global commerce, it has to be stable. And the USD is the largest currency on earth. And that's why so many of these projects create a dollar stablecoin.

So we wanted something for international commerce. We wanted something for remittances and for daily life and use.

CT: How do you plan to compete with other stablecoins?

WC: The first off the bat is the trust, trust and backing. People will be able to know that we have the reserves that we talk about. Look at all the issues USDT is having in Europe, and potentially in other countries. They have audits. But we don't know how often those audits are. We don't know how real they are. And so that's already the first level of competition.

The second level, which will come later in the stablecoin USDKG’s journey, will be that revenue model, the yield, the DeFi lending and farming. We plan to integrate many products with USDKG to keep it at the top of the crypto world.

CT: What role does the Kyrgyz government play in USDKG?

WC: Kyrgyzstan is going through a modernization process. They want the world to know that they're digitizing their economy, and they want to become the next El Salvador, but they want to do it bigger and better.

So the role of the government here is very important, because we're not a central bank digital currency (CBDC), and people need to know that because there is a separation, the government is here to back us. They're even here to provide gold reserves if it's needed. But the operation and management are all run by the private entity USDKG in Kyrgyzstan. So there is a limited role, but it is a strong one in the sense that it gives us the trust and the confidence of the people around.

CT: What do you believe is the government of Kyrgyzstan’s motivation for getting involved in this project?

WC: It's part of their larger Web3 strategy. So they know that if they back USDKG to become a prominent worldwide project, it will help their mission more to transform Kyrgyzstan into a Web3 paradise. People will notice USDKG, they will notice Kyrgyzstan and will say, “Well, how about we check up their laws? Is it friendly there for businesses, for taxes?” And they'll want to move there, right? A crypto haven. And so it's completely in their interest to back our project and to be so involved.

CT: How can holders of your stablecoin confirm that it is fully backed?

WC: So we're in the process of launching in the next quarter. And the gold is going to be audited by one of the Big Four. We don't know which one yet, KPMG, Ernst & Young, something like that. And that will serve as our sort of certificate of honesty, having a big company that's well known and well respected to go there and say, “You know what? We counted it. It's there and it's real.”

Beyond that, we want to do that every six months. We want to make sure that we're consistently auditing ourselves. And we're going to post that online on the blockchain. It's going to be online for everybody to see.

CT: Why should crypto investors see Kyrgyzstan as an emerging global hub for digital assets?

WC: Three years ago, Kyrgyzstan already started with their top-down changing of legislation, even financial infrastructure. They started changing the laws, saying, “Crypto is legal here, crypto businesses are legal. You can sign up as a service provider, and we'll register you.”

They already had 140 registered crypto businesses. And then they kept going. They said, “Okay, we'll give you tax rebates. We're going to lower tax rates for crypto companies.” So you put all those things together, and it becomes more attractive. That's why people should pay attention. That's why they should think about “what is the best place for me when it comes to crypto,” because this is a country in Central Asia, which you wouldn't associate with crypto. They want to come on the scene so hard that they're making it happen. You know, inviting people, lowering the taxes and changing the legislation.

CT: Is there anything else about USDKG that you think people should know?

WC: Yeah, not regarding the product itself, but something that is close to my heart because I recently visited Bishkek.

Kyrgyzstan is a lovely and beautiful country. And I think that comes with the token because this is national pride we're talking about. It's not just a group of people who want to make money. It's national pride. It's people wanting to invite the world to their country to see what they have to offer. And I've never seen things perform so well as when you have a pride behind it. National pride to me is something so important. And they have such a beautiful culture.

So what I would tell everybody is to take a look at USDKG, take a look at Kyrgyzstan and visit Bishkek. They have great tourism there. And see where it goes. Follow us around.

Find out more about USDKG

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