Stablecoin operator Paxos originated PAX Gold (PAXG), a gold-backed Ethereum (ETH) token under the Ethereum blockchain. Paxos published the product's launch claiming that it is "the first crypto asset redeemable for physical gold." Besides, the New York State Department of Financial Services (NYDFS) presented its approval of the issue in an official statement, defining it as "the first gold-backed virtual currency in New York State." According to the report, each PAXG token will be backed by a fine troy ounce of London Good Delivery gold stored in London's professional vault facilities.
According to reports, the users who own the tokens in question own the gold they represent, but the tokens can be flown like any other ERC-20 token, which is much simpler than sending gold. PAX Gold (PAXG) is a digital asset where one token is backed by one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, stored in Brink's gold vaults. Anyone who owns PAXG owns the underlying physical gold, held in custody by Paxos Trust Company. ADVANTAGES OF TOKENIZATION Paxos charges fees for on-chain transactions involving the token and the creation and destruction of PAXG.
Paxos CEO and co-founder Charles Cascarilla explained on the expansion praising the advantages of tokenization. In a digital and global commercial system, holding physical gold is a cumbersome and outdated investment; it is not easy to trade, divide, move, or profit versus other investments. It also admits that trading gold derivatives, such as exchange-traded funds, futures, or unallocated gold, is easy. It is not the legal property of physical gold, and its accessibility is limited. Gold purchased through non-accredited retail outlets is expensive and risky, as its quality and provenance are not verified.
The company claims that users can convert tokens to and from fiat currencies or unallocated gold or redeem tokens for physical gold bars on its website. Furthermore, token holders can also search for the serial number, brand code, gross weight, fineness, and slight weight of their gold bars. Binance announced a partnership with Paxos to launch a stablecoin backed by the United States dollar.