Paxos Trust Company, a regulated financial institution that digitizes and mobilizes assets, today launched PAX Gold (Ethereum ticker: PAXG), the first crypto-asset redeemable for physical gold. The New York State Department of Financial Services (NYDFS) has approved Paxos to issue PAX Gold, making PAX Gold the first regulated digital gold product.
PAX Gold is an asset-backed digital token, each representing one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London. PAX Gold customers own the underlying physical gold, while also benefiting from the speed and mobility of a digital asset. Because PAX Gold represents physical gold, its value is tied directly to the real-time market value of gold. PAX Gold is built as an Ethereum token, following the ERC-20 protocol, so that it is easy to integrate with exchanges, wallets, lending platforms and other crypto products. Rather than the usual storage fees that come with gold bars, Paxos charges negligible fees for on-chain transactions and at the point of token creation or destruction on Paxos.com.
Charles Cascarilla, CEO and Co-Founder of Paxos, stated, “In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it’s not easy to trade, divide, move or leverage against other investments. While it’s easy to trade gold derivatives – ETFs, futures and unallocated gold – these are synthetic representations, not legal ownership of physical gold, and have limited accessibility. Gold purchased through unaccredited retail outlets is not only expensive, but also risky as the quality and provenance of the gold are unverified.”
Cascarilla continued, “PAX Gold solves these fundamental challenges. It’s as easy to trade as ETFs or bitcoin, is extremely mobile and divisible, and it also gives holders ownership to the highest quality gold in the world. It’s never been easier to own or trade gold and we are thrilled to give both institutions and individuals access to gold in a faster and cheaper way. By putting gold on a blockchain, we’re democratizing access to gold.”
On Paxos.com, customers can convert their tokens to and from fiat currency or unallocated gold, or redeem tokens for physical gold bars. At any time, token holders can look up the serial number, brand code, gross weight, fineness, and fine weight of their gold bar holdings using an Ethereum wallet address.
Paxos is uniquely situated to offer and administer an asset like PAX Gold. As a New York State-chartered Trust company, Paxos is regulated by the NYDFS, requiring it to uphold certain standards of stability, transparency and accountability. Additionally, Paxos has experience issuing asset-backed tokens including Paxos Standard (PAX), the most liquid, regulated dollar-backed stablecoin. Further, Paxos has deep experience providing digital services to the institutional gold market through its post-trade settlement services, giving Paxos the ability to leverage relationships with premium institutions like Brink’s for gold storage and INTL FCStone for sourcing gold and receiving live pricing data.
Cascarilla concluded, “The investment-grade spot gold market represents a $3.5 trillion opportunity, but most of the liquidity of the market is limited to large industry participants. PAX Gold finally offers a product that is both easy to own and trade, at any investment quantity.”
PAX Gold aligns with the Paxos mission to enable the movement of any asset, any time, in a trustworthy way. With PAX Gold, investors and traders around the world can own and trade real gold like Bitcoin. Differentiating benefits of PAX Gold include:
- Ability to own and redeem London Good Delivery gold bars;
- Free gold storage in the most secure vaults in the world;
- Easy access to the gold market with low minimum investment (0.01 PAXG, roughly $15 at today’s prices) and fractional bar ownership (divisible to 18 decimal places); and
- A regulated product that ensures the quality, weight, and provenance of each ounce of gold backing PAX Gold tokens.
Paxos has engaged Withum, a nationally top-ranking auditing firm, to independently verify at specific points in time that the entire supply of PAX Gold tokens is consistent with troy ounces of gold held within the custody of third parties in the United Kingdom on behalf of Paxos Trust Company, LLC. In that regard, Withum performs specific month-end attestation procedures on these accounts in accordance with standards established by the AICPA. These monthly attestation reports can be found on the Paxos website.