PAX Gold (PAXG)
Pax Gold (PAXG) is a stablecoin on the Ethereum blockchain backed by physical gold. It was introduced in September 2019 by the Paxos Trust Company.
Overview
Pax Gold was developed by Paxos Trust Company in 2018, driven by the vision of Co-founder and CEO Charles Cascarilla. He aimed to create a digital currency backed by gold, addressing the challenges of physical gold investments, such as the difficulty in trading, dividing, or leveraging against other assets. Pax Gold is designed to solve these challenges while ensuring full regulatory compliance.
PAXG is an ERC-20 token created with smart contracts on Ethereum. Each PAXG token is linked to an ounce of gold stored in Brink's Gold Vaults in London. Token holders effectively own the physical gold, which is held by Paxos Trust Company and can be exchanged for physical gold bars.
| Ticker | PAXG |
| Category | Stablecoins |
| Website | https://www.paxos.com/paxgold/ |
| @paxosglobal | |
| Contract Addresses | |
|---|---|
| ethereum | 0x45...78 Copied! |
Shortly after its launch, Paxos Gold garnered support from numerous blockchain platforms, including a significant purchase by Nexo, a major crypto lender, boosting PAXG's market capitalization.
Features
Accessibility
PAXG offers the advantage of being easily traded or moved worldwide at any time, unlike physical gold, which requires logistics and documentation for transport.
Regulations
PAXG is a regulated asset, redeemable for physical gold bars. It is fully overseen by the New York State Department of Financial Services (NYDFS), ensuring it is backed by gold stored in secure vaults. BitGo, a cryptocurrency custodian, also supports Paxos Gold Token.
Low fees and flexibility
PAXG can be exchanged for fiat, physical, or unallocated gold through the Paxos platform. It can be traded against other digital assets on popular exchanges, with competitive fees for creation and redemption and low Ethereum transaction fees. There are no storage fees for PAXG.
Redeemable
PAXG allows redemption for LBMA-accredited Good Delivery gold bullion bars, with smaller amounts redeemable through global gold retailers. Institutional clients can redeem unallocated Loco London Gold, and Paxos customers can convert PAXG to U.S. dollars at market rates.
Security
The smart contract for Pax Gold is based on the Paxos Standard smart contract, which was audited by third-party experts, including Nomic Labs, ChainSecurity, and Trail of Bits, in late 2018. An additional audit by Trail of Bits was conducted in early 2019 for potential upgrades.
Competition
Pax Gold faces competition from other gold-backed crypto tokens such as Tether Gold and Digix Gold Token (DGX), both of which are also built on the Ethereum blockchain. Other emerging tokens include Meld Gold by Algorand and Perth Mint Gold Token (PMGT).