Popular stablecoin issuer Paxos has now planned to digitize the most-precious metal gold. Bridging the gap between the gold investors and crypto enthusiasts, Paxos unveils a new gold-backed cryptocurrency Pax Gold (PAXG).
Each of the Pax Gold tokens will be pegged to one ounce of gold. Having received the regulatory approval from the New York Department of Financial Services (NYDFS), the Paxos Exchange now lists PAXG token to trade against the dollar. Paxos CEO Charles Cascarilla said that it will soon list additional trading pairs on its platform. Paxos calls this as the “first crypto-asset redeemable for physical gold”.
The Pax Gold (PAXG) is an ERC-20 token built on the Ethereum blockchain network. Thus, it can easily integrate with different crypto exchanges, lending platforms, wallets, and other crypto products. Paxos also states that digitizing gold with help in easily mobilizing the gold asset. Charles Cascarilla, CEO and Co-Founder of Paxos, stated:
“In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it’s not easy to trade, divide, move or leverage against other investments.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.”
Cascarilla notes that the Pax Gold token solves some of the fundamental challenges and is easily tradeable just like the Bitcoin and the ETFs. He further adds that trading gold has never been so easy as they are entirely democratizing access to gold by putting it on a blockchain network. The PAXG token will be available to both – institutional and individual traders.
Being regulated by the NYDFS, Paxos holds certain standards of transparency, stability, and accountability. Moreover, with the Paxos Standard, the company has sufficient experience in issuing asset-backed tokens. With its post-trade settlement services, the company also has experience in offering digital services to institutional clients.
All-in-all Paxos is quite robust in dealing with such products in the market and will be doing a fairly good job in offering its services. Cascarilla said:
“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 also partnered with top-ranking auditing firm Withium to ensure that the entire supply for Pax Gold tokens remains consistent and secure. Apart from that, Paxos Trust Company together with Binance announced their partnership on the launch a USD-backed stablecoin, Binance USD (BUSD).