How USDKG is building a gold-backed stablecoin with real reserves: AMA recap

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As stablecoins mature into core financial infrastructure, transparency and reserve quality are moving to the center of the discussion. In a recent Cointelegraph AMA, representatives of USDKG outlined how gold-backed collateral, regulatory oversight, and live market integrations define their approach.

“USDKG is a central initiative in what’s happening in Kyrgyzstan,” said Advisory Lead William Campbell, framing the project as part of a broader effort to modernize the country’s financial system through digital assets. “Every new sector needs a financial system to base itself on, and USDKG was created to serve as that foundation.”

Stablecoins Beyond Hype: USDKG and the Rise of Gold-Backed Value [Brought to you by @USDKG_Official] https://t.co/fRSpmibqNa

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Building a gold-backed stablecoin from the ground up

Unlike many stablecoin projects that begin with distribution and infrastructure, USDKG started with physical reserves. Advisory Co-Lead Gabriel Guerra explained that the first phase focused on acquiring and auditing gold before any tokens were issued. “We do have gold reserves already, and they’ve been independently audited,” Guerra said. “The audit is publicly available on our transparency page, so users can verify both the quantity and quality of the gold backing USDKG.”

Following the reserve setup, USDKG held its official launch in Kyrgyzstan, an event attended by senior government officials, including the Prime Minister and President. Shortly after, the first batch of tokens was minted. “We started with 50 million USDKG, backed by slightly more than 50 million dollars’ worth of gold,” Guerra noted. “Since then, USDKG has gone live on decentralized exchanges like Coinbase and Uniswap, and has been integrated into major wallets, including Ledger, MetaMask, and Exodus.”

While the stablecoin is pegged to the US dollar, both speakers emphasized that gold plays a critical role in the project’s risk profile. Campbell clarified that USDKG holders do not benefit directly from gold price appreciation, but rising gold prices strengthen the system through overcollateralization. “As gold prices increase, the backing becomes stronger,” he said. “That creates an additional layer of safety and reinforces confidence that all user deposits are fully covered.”

Why gold, and why now

The AMA also explored the broader role of asset-backed stablecoins as users and institutions question opaque reserve structures. Guerra pointed to growing skepticism toward aggressive yield-driven stablecoins and the resulting demand for verifiable backing: “You can’t really launch a stablecoin today without proof of reserves, that’s become the baseline expectation, especially for regulators and institutional participants.”

Campbell placed USDKG’s gold backing in a longer historical context, arguing that the model reflects how monetary systems functioned for centuries. “For most of history, currencies were tied directly to gold or silver,” he said. “It’s not unusual to think that digital currencies could return to that model, just implemented through modern infrastructure.”

Regulation embedded into the system

One of USDKG’s defining features is its close alignment with Kyrgyzstan’s regulatory framework. Campbell described the stablecoin as part of the country’s ambition to position itself as a digital asset hub in Central Asia, with blockchain integrated directly into national financial infrastructure.

USDKG operates with oversight from the Ministry of Finance, and governance is enforced at the protocol level. Guerra explained that new token issuance requires multi-signature approval, including authorization from a government representative. “When we mint new tokens, approval from the government is required, and that process is embedded into our smart contracts,” explained the Advisory Co-Lead. “It’s a hybrid model where we operate as a private company, but issuance follows strict oversight.”

This structure, the team argued, supports compliance without limiting functionality. It also enables collaboration with local virtual asset service providers and financial institutions. “Engaging local VASPs and banks is essential,” Campbell emphasised. “It ensures AML and KYC standards are met and helps build a compliant ecosystem from the start.”

Expansion, exchanges, and institutional focus

With domestic infrastructure in place, USDKG is preparing for international expansion, beginning with Asia. Campbell cited regional proximity and growing digital asset activity as key factors. At the same time, he stressed that market entry depends on legal opinions and regulatory readiness.

Centralized exchange listings are also part of the roadmap. Guerra confirmed that while USDKG is currently focused on decentralized liquidity, listings on major centralized platforms are planned as the next step.

In competition with established stablecoins, Campbell emphasized an institutional-first approach. “Institutional players care deeply about compliance, reserve quality, and legal clarity,” he stated. “If you earn their trust first, volume and broader adoption tend to follow.”

The AMA concluded with a look ahead to 2026, which the team described as a year focused on growth, expanded circulation, and a stronger global presence. As interest in gold-backed assets increases across traditional and digital markets, USDKG positions itself as an early example of how hard assets and blockchain-based finance can converge in a regulated, transparent framework.