PAX Gold is a cryptocurrency and gold hybrid that links the gap between the two investment options. It provides the security and stability of cryptocurrencies.
Though NFTs and cryptocurrencies and other modern investment options have become trendy, physical commodities such as gold are still in high demand. In 2021, the global market capitalization for cryptocurrency exceeded $2 trillion. Now, investors must think: which option should I choose — crypto or gold?
PAX Gold (PAXG), is one crypto company, whose objective is to make gold tenure more democratic and available to everyday investors by letting them to trade it like any other cryptocurrency.
PAX Gold has revealed a method to syndicate cryptocurrency with physical gold assets.
Paxos Gold is a cryptocurrency that is sponsored by real gold reserves held by Paxos, a for-profit company in New York. Each PAXG token is linked to a 1:1 ratio to one troy ounce (t oz) of a 400-ounce London Good Delivery gold bar warehoused at Brinks Security vaults in London. The Paxos-backed cryptocurrency, PAXG, is backed by the London Bullion Market Association (LBMA) certified gold bars and may be redeemed for actual bullion.
PAX Gold investors are secure in the trouble of storing and securing physical gold, as well as transporting it. Also, shares can be bought fractionally, which makes it more accessible for retail investors who otherwise would be caught up by the high cost of gold. PAX Gold boasts a combination of qualities from both physical gold ownership and cryptocurrency that provide solutions to many modern-day challenges in the gold market such as high costs, storage concerns and the lack of liquidity.
The Paxos Trust Company, a financial institution and tech company based in New York City that specializes in blockchain technology created PAX Gold. Charles Cascarilla and Richard Teo, both former analysts at different firms (Cascarilla at Goldman Sachs and Teo at Cedar Hill Capital Partners), created Paxos in 2012.
The PAX Gold token is built on the Ethereum blockchain which gives it portability among wallets, exchanges, decentralized finance (DeFi) platforms, and other apps that use Ethereum. PAX Gold lets users trade, stake, or redeem their tokens for high-quality gold bars. These gold bars are ascribed by the London Bullion Market Association and stored in secure vaults around the world. Even with these top-notch security measures and high-quality gold, PAX Gold doesn’t charge any custodial or storage fees — only a 0.02% transaction fee.
PAX Gold is not only accredited with a gold standard, but it also functions dependably and transparently. Both PAX Gold and its holding company, Paxos Trust, are under the legal jurisdiction of the New York Department of Financial Services (NYDFS). Moreover, PAX Gold protects the consumer and the company’s assets autonomously, ensuring that the consumer is secure in the event of bankruptcy.
PAXG experiences monthly audits from a third-party auditing firm to ensure that its gold reserves match the supply of PAXG tokens.
As stated earlier, Pax gold is tokenized gold that operates on a blockchain network. The PAXG token explicitly represents physical gold from the Paxos trust company.
The PAXG tokens have serial numbers that match those of individual gold bars. The serial number, value, and other features of a holder’s physical gold may be exposed by inputting an individual’s Ethereum wallet address on the PAXG lookup tool. They also have the option to adapt their PAXG into fiat money, another cryptocurrency.
The key difference between a gold ETF and Pax Gold is that an ETF purchases a contract that mimics the price of gold, but the user does not own the underlying asset.
PAX Gold will produce revenue in two ways: a small premium on the gold and a tokenization fee at the time of primary purchase. The proportion for the tokenization fee depends on the amount purchased initially; it is 1% for purchases of one ounce or less but significantly lower for larger purchases. Paxos will not charge custody fees, but it will charge a fee of 0.02% whenever a customer wants to buy or sell a token on a blockchain network.
You can get interest on your PAXG by lending it to a custodian, but rates will vary depending on the lender. Staking your PAXG also permits you to earn interest, but you must hold your tokens for a precise period of time.
You can purchase it on several exchanges, including Binance, Kraken, KuCoin and Coinbase.
The future of asset tokenization is very bright. With new use cases being revealed every day, it’s thrilling to think about all the possibilities for how asset-backed tokens can help people and businesses around the globe.
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