What is PAX Gold (PAXG)?

Quick Facts

  • Issuer: Paxos Trust Company, founded in 2012
  • Launched: September 2019
  • Backing: 1 PAXG = 1 fine troy ounce of physical gold
  • Storage: LBMA-accredited Brink's vaults in London
  • Blockchain: Ethereum (ERC-20), Solana, and Polygon
  • Audits: Monthly third-party attestations of gold reserves
  • Regulator: NYDFS and OCC (US national trust charter)

Introduction

PAX Gold (PAXG) is a regulated, asset-backed digital token that gives holders direct ownership of physical gold stored in professional vaults. Each PAXG token represents exactly one fine troy ounce of a London Good Delivery gold bar, combining the stability of a centuries-old commodity with the speed and accessibility of blockchain.

Unlike traditional 'paper gold' products such as ETFs, PAXG grants holders legal ownership of specific, identifiable gold bars — not just price exposure.

History & Background

Paxos Trust Company was originally founded in 2012 as itBit, a Bitcoin exchange. In 2015, the company rebranded to Paxos after receiving the first limited-purpose trust charter for digital assets from the New York State Department of Financial Services (NYDFS).

Building on its experience with regulated stablecoins, Paxos launched PAX Gold in September 2019 as the first regulated gold-backed digital token — opening up institutional-grade gold ownership to a much wider audience.

How PAX Gold Works

When a user purchases PAXG, Paxos allocates a corresponding amount of physical gold in LBMA-accredited vaults operated by Brink's in London. Each token is linked to a specific gold bar, and holders can verify that bar's serial number, weight, and purity using Paxos's on-chain lookup tools.

Reserves are independently attested every month to confirm that the number of PAXG tokens in circulation matches the physical gold held in custody. Eligible holders can also redeem tokens for physical gold bars or for cash, a feature rarely offered by comparable products.

Tokenomics

PAXG follows a fully collateralized, demand-driven issuance model. New tokens are minted only when gold is deposited into the custody vaults, and tokens are burned when gold is redeemed or sold. This keeps the token supply in perfect lockstep with real-world gold holdings.

Paxos charges no ongoing storage or custody fees — a meaningful advantage over traditional gold ETFs and physical ownership. Minimal creation and redemption fees are tiered by volume, keeping costs low for most participants. Fractional ownership is supported, allowing investors to buy as little as 0.001 troy ounce.

Circulating supply ? 454,419 PAXG
Total supply ? 454,419 PAXG
Max supply ? 270,048 PAXG
Updated 3d ago

Ecosystem & Use Cases

PAXG is tradeable on major centralized and decentralized exchanges, and its multi-chain deployment across Ethereum, Solana, and Polygon broadens its reach in DeFi. Key use cases include:

  • Portfolio diversification with a digital representation of a traditional safe-haven asset
  • DeFi collateral, where PAXG can be used as collateral in lending and borrowing protocols
  • Cross-border value transfer with the speed of blockchain and the stability of gold
  • Fractional gold investment without storage logistics or minimum bar requirements

Team, Governance & Community

Paxos was co-founded by Charles Cascarilla (CEO) and Rich Teo (CEO of Paxos Asia). The company operates under strict regulatory supervision from both the NYDFS and the OCC, which oversees Paxos Trust Company, N.A. at the national level.

Governance over PAXG is centralized under Paxos, reflecting its status as a regulated financial institution. The board includes notable figures from traditional finance and regulation, reinforcing its compliance-first culture.

Advantages

  • Physical gold ownership with legal rights to specific, audited gold bars
  • No storage fees, unlike physical gold or many ETF structures
  • Regulatory credibility through NYDFS and OCC oversight with monthly audits
  • Blockchain efficiency enabling 24/7 trading, fractional ownership, and instant settlement
  • Redeemable for LBMA-accredited Good Delivery gold bars
  • Multi-chain availability on Ethereum, Solana, and Polygon

Risks & Challenges

  • Centralization risk: Paxos acts as sole custodian and issuer; trust in the institution is essential
  • Counterparty risk: Holders depend on Paxos's solvency and vault arrangements with Brink's
  • Regulatory risk: Changes in US financial regulation could affect operations or token redemption
  • Gold price volatility: PAXG's value moves with gold markets, which can be volatile over short periods
  • Liquidity constraints: Redeeming for physical gold bars requires holding minimum threshold amounts

Long-Term Vision

Paxos aims to modernize the global financial system by making real-world assets instantly transferable on blockchain infrastructure. For PAXG, this means broadening access to gold as a store of value — removing barriers of geography, minimum investment size, and physical logistics.

As tokenized real-world assets (RWA) gain traction across financial markets, PAXG is positioned as a foundational building block: a regulated, audited, and redeemable digital commodity that bridges traditional finance and the evolving on-chain economy.

Frequently Asked Questions

Each PAXG token represents one fine troy ounce of a London Good Delivery gold bar stored in LBMA-accredited Brink's vaults in London. Holders have legal ownership rights to that specific gold under the custody of Paxos Trust Company.

PAX Gold is issued by Paxos Trust Company, a New York-chartered trust company regulated by the NYDFS and overseen at the national level by the OCC. Paxos was founded in 2012 and has been a licensed digital asset custodian since 2015.

Paxos conducts monthly independent attestations to confirm that the physical gold held in vaults matches the number of PAXG tokens in circulation. Holders can also look up the serial number, weight, and purity of the specific gold bar backing their tokens on-chain.

Yes. PAXG is the only gold-backed token redeemable for LBMA-accredited Good Delivery gold bullion bars. Institutional customers can also redeem for unallocated Loco London Gold, and smaller holders can convert to cash.

No. Paxos charges zero storage or custody fees for holding PAXG, which is a key advantage over physical gold ownership or traditional gold ETFs. Only minimal creation and redemption fees apply, tiered by volume.

PAXG is primarily an ERC-20 token on Ethereum, and is also available on Solana (as an SPL token) and on Polygon. This multi-chain deployment extends its use in DeFi and broadens accessibility.

Unlike a gold ETF, PAXG gives holders direct legal ownership of specific, identifiable gold bars rather than a claim on a pooled fund. It also enables 24/7 trading, fractional ownership, instant settlement, and physical redemption — features not available with traditional ETFs.

PAXG is not a stablecoin in the traditional sense because its price fluctuates with the market price of gold rather than being pegged to a fiat currency. It is best described as a commodity-backed or real-world asset (RWA) token.