Stablecoin operator Paxos launched PAX Gold (PAXG), a gold-backed Ethereum (ETH) token, Cointelegraph reports.
Paxos made the announcement on 5th September claiming that it is “the first crypto-asset redeemable for physical gold.” Furthermore, the New York State Department of Financial Services (NYDFS) has given its approval of the token in an official statement, defining it “first gold-backed virtual currency in New York state.”
The Paxos press release says: “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CEO and co-founder of Paxos said, “In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it’s not easy to trade, divide, move or leverage against other investments.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.”
He then added, “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.”
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.”
Paxos has engaged Withum, a 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.