PAX Gold.
Essentially PAX Gold (PAXG) is a stablecoin that uses blockchain technology and is backed by a real asset, gold.
One PAX Gold token represents one fine troy ounce of a LBMA approved Good Delivery gold bar.
The gold is stored in a professional vault facility in Brink’s vaults in London.
PAX Gold’s value is tied directly to the real-time market value of that physical gold.
Gold backed cryptocurrency.
Gold-backed cryptocurrency is a type of crypto stablecoin, where each token is backed with physical gold.
What is the LBMA?
The LBMA stands for the London Bullion Market Association.
If you hold or receive gold bullion bars that are “LBMA Certified”, then these claims can only be specifically made by bullion refineries that meet a specific high standard.
These stringent criteria, are put in place and regularly monitored by the LBMA.
It produces a standard that is trusted around the world (also known as, ’Good Delivery’).
Read more about the LBMA here.
What is the basic concept?
Essentially a digital token is issued that represents a value of gold (1 troy ounce of gold equals 1 token).
Owning a PAX Gold digital token means that you own the underlying physical gold in custody by Paxos Trust Company.
The token is run on the Etherium blockchain and all transactions are done via smart contracts, giving transparency and security.
PAXG holders can look up the serial number, value and physical characteristics of their vaulted gold just by entering their Ethereum wallet address.
PAX Gold Tokens (PAXG).
PAX Gold is different from gold ETFs or Physical gold delivered to your door, in the fact that PAX Gold Tokens can be bought or sold 24hrs a day on an exchange.
What are the benefits of PAXG?
PAXG essentially gives customers the benefits of actual physical ownership of specific gold bars with the speed and ease of a digital asset.
PAXG customers are also able to have fractional ownership of physical gold bars.
Converting tokens.
PAXG can be converted to allocated gold, unallocated gold, or fiat currency quickly and efficiently via the Paxos platform.
PAX Gold is the only gold token that you can redeem for LBMA-accredited Good Delivery gold bullion bars.
Available to anyone.
It is possible to own tiny fractions of a PAXG token.
This makes fractional gold bar ownership easy and available to anyone, no matter how much money you have available to invest.
PAXG Allocated gold vs unallocated gold.
PAXG represents allocated gold.
Allocated gold means the physical gold you buy is stored in secure, insured vaults. Legally, you are the owner of the gold and the account provider is the custodian.
Unallocated gold accounts don’t physically store your gold. Unallocated gold remains the property of the bank, you the investor are essentially a creditor of the bank.
PAXG ERC-20 token.
PAXG is an ERC-20 token, which provides token holders with access and manoeuvrability across the Ethereum blockchain.
What is ERC-20.
The most significant Ethereum tokens are known as ERC-20.
It is used for all smart contracts on the Ethereum blockchain for token implementation and provides a list of rules that all Ethereum-based tokens must follow.
You can use PAXG wherever ERC-20 tokens are supported.
What is a ERC-20 Wallet?
It is a digital wallet which stores your ether cryptocurrencies and ERC-20 tokens.
PayPal and Paxos.
According to the Paxos website, PayPal will be launching a service enabling customers to buy, hold and sell cryptocurrency.
“To increase consumer understanding and adoption of cryptocurrency, the company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet. The service will be available to PayPal accountholders in the U.S. in the coming weeks. The company plans to expand the features to Venmo and select international markets in the first half of 2021. The service is enabled in the U.S. through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.”
Why buy gold using a digital token?
It has the divisibility, fungibility and tradability of any digital asset like bitcoin but is backed by physical gold.
The total supply of PAXG is a 1:1 ratio – one fine troy ounce of gold equals one PAXG token.
Is PAX Gold regulated?
Yes. Paxos is regulated by the New York State Department of Financial Services. PAXG is also approved and regulated by the DFS and fully-backed by allocated gold held in secure vaults.
Can you trust Pax Gold?
Paxos Trust Company was founded in 2012 and has an established and successful track record of developing and maintaining stablecoins including the Paxos Standard token.
The company has 110 employees in three global offices with its headquarters in New York.
The company maintains frequent, publicly-available audits.
Fees.
“Redemptions of PAXG tokens (0.03-1% based on volume tiers) in the Paxos wallet, low on-chain Ethereum transaction fees (0.02%) for and zero storage fees. As with other ERC-20 tokens, nominal Ethereum gas fees apply for on-chain transactions.”
You can read more about fees of the Pax Gold website.
What are the downsides?
You have to be a fully verified user. If you want full privacy when owning gold, then this could be an issue.
Tokenised commodities can come with various risks, you must consider if digital tokens are best for you.
You would need some knowledge of cryptocurrency.
Obviously, the issuer of these digital tokens must adhere to legal requirements.
Therefore, if needed to comply with regulation, the company could be asked to freeze or wipe an account.
Trade PAXG easily.
PAX Gold can be traded easily.
You can trade PAXG against other digital assets on popular crypto exchanges, and you can use PAXG wherever ERC-20 tokens are supported.
What are the alternatives to Pax Gold?
If you are looking for an alternative to a gold backed crypto token, then it is worth checking out Vaultoro.
With Vaultoro you can buy gold directly with bitcoin.
Your gold is fully insured and 100% allocated in your name.
SPECIAL OFFER! Sign up through our link. Trade a minimum of €500 worth of gold, and receive 1/2 A GRAM OF GOLD FREE!
Claim 1/2 a gram of gold when you trade a min of €500 worth of BTC/GOLD
Read our Vaultoro review here.
Pax Gold Review
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Pax Gold Review
Pax Gold
Essentially PAX Gold (PAXG) is a stablecoin that uses blockchain technology and is backed by a real asset, gold.
One PAX Gold token represents one fine troy ounce of a LBMA approved Good Delivery gold bar. The gold is stored in a professional vault facility in Brink’s vaults in London.
PAX Gold’s value is tied directly to the real-time market value of that physical gold.
Pros
PAXG essentially gives customers the benefits of actual physical ownership of specific gold bars with the speed and ease of a digital asset.
PAXG customers are also able to have fractional ownership of physical gold bars.
Cons
You have to be a fully verified user. If you want full privacy when owning gold, then this could be an issue.
Tokenised commodities can come with various risks, you must consider if digital tokens are best for you. You would need some knowledge of cryptocurrency.