PAX Gold PAXG

PAX Gold is a token issued by Paxos, a New York-regulated trust company, where each unit represents ownership of one fine troy ounce of London Good Delivery gold held in professional vaults in London. It is, in effect, allocated physical gold with a blockchain transfer layer bolted on.

The practical benefit is divisibility and movement. Physical bullion trades in whole bars and settles slowly; PAXG can be sent in fractions of an ounce, at any hour, and holders can look up the specific bar their holding is allocated against. Paxos publishes attestations of the metal held, and larger holders can redeem for physical bullion or for cash.

It should be understood as a claim, not as gold in your possession. The whole proposition rests on Paxos remaining solvent, the vaults being audited honestly, and the regulator doing its job — which is a specific and quite different risk from holding metal yourself, not the absence of one. Redemption for physical has minimums and costs that put it out of reach for small holders. And it tracks gold: it is not a growth asset, it is not a dollar, and it will do exactly what the gold price does, including going down.