PAX Gold (PAXG) is a cryptocurrency that runs on the blockchain and is backed entirely by physical gold. Launched by Paxos Trust Company in 2019, each PAXG corresponds to exactly 1 troy ounce (31.1 grams) of gold in London Good Delivery standard, held in vaults in London. So, when you hold PAXG in your wallet, you are actually holding gold bullion behind the scenes.
The price of PAXG closely tracks the price of gold per ounce. Paxos is committed to holding the same amount of gold in the vault for each token in circulation, thus maintaining a constant balance between the total PAXG supply and the amount of gold in reserve. Because it operates as an ERC-20 token on the Ethereum network, it is compatible with many crypto exchanges, wallets, and DeFi platforms. In short, PAXG offers a "digital gold" alternative that combines the trust and permanence of gold with the speed and accessibility of crypto. Let's explore how PAXG came about, the steps involved in shaping this idea, and why it has transformed gold investing so dramatically.
Definition and Origins of PAXG
PAX Gold is a stablecoin developed by Paxos to reshape gold, fully backed by physical gold. Each PAXG is issued with the approval of the New York State Department of Financial Services and is equivalent to a full ounce of London Good Delivery gold. These gold coins are stored as LBMA-certified bullion in the world's most secure vaults, such as Brink's. So, the PAXG you see in your wallet is actually your share of a physical bullion.
The origin story of PAXG lies in the unchanged challenges of investing in gold. Buying gold bullion, finding safe storage, cashing it out, splitting it into smaller pieces… These are all unique challenges. Paxos CEO Charles Cascarilla considers physical gold a "burdensome and now archaic" investment. It's often impossible to buy and sell gold quickly or use it as collateral. Gold ETFs or futures, however, don't fully grant ownership of real gold. This is where PAXG comes in; by representing gold on the blockchain, it offers both individual and institutional investors a modern gold alternative that is easily divisible and transferable in seconds. In a sense, it makes gold investing more accessible.
When most people think of stablecoins, they think of tokens printed in exchange for dollars. PAXG is the gold version of this model. Its price is directly tied to the ounce value of gold, making its value more stable. However, what truly distinguishes it is that it is backed by real gold, not cash. Paxos charges only a small transaction fee and Ethereum gas to print PAXG, significantly reducing the traditional costs of gold investing. The company also pays particular attention to security: smart contracts are audited by independent companies, the gold reserve and token supply are verified monthly, and customer assets are completely separated from Paxos's balance sheets. This ensures that PAXG holders' gold is securely protected even in the event of bankruptcy. Here's how you can see the difference between Paxos and other gold investments:
Feature
PAX Gold (PAXG)
Major Gold ETFs
Gold Futures (Comex)
LBMA 400 oz Gold Bar
Unallocated Gold
Custody Fees
No Fee
19–40 bps per year
N/A
5–25 bps per year
0–10 bps per year
Minimum Purchase
0.01 t oz (~$20)
1 share (approx. $200)
1 contract (100 t oz ≈ $200K)
Typically ~$800K per bar
Variable
Time to Settle
Instant*
T+2 days
Expiration date
T+2 days
T+2 days
Allocated
✓
Variable
✕
✓
✕
Instantly Redeemable for Physical
✓
$4.00
✕
✓
✕
Regulated
NYDFS
SEC & equivalents
CFTC
✕
✕
PAXG's History: Major Milestones
Paxos Gold has achieved many milestones since its launch. The coin has faced a number of challenges, particularly in terms of regulation. Let's examine the critical developments in the coin's history:
2019 - Launch and Regulation: PAX Gold was announced by Paxos Trust Company on September 5, 2019, making a quiet but bold entry into the crypto world. Launched with the approval of the New York Financial Services Authority (NYDFS), PAXG became the world's first regulated gold-backed digital asset. With the launch, Paxos delivered a significant message of trust: Each PAXG is backed by a single piece of physical gold, and users can convert their tokens into real gold. To ensure this wasn't just a promise, Paxos even added a verification tool to its website; users can see which gold bar their PAXG in their wallet corresponds to, along with its serial number, purity, and weight, with a single click. 2020 - Exchange Listings: After a quiet debut in 2019, 2020 was the year that PAXG gained visibility. Binance's listing of PAXG in August instantly brought the project to millions of users. Binance paired PAXG with BTC, BNB, BUSD, and USDT, increasing liquidity and providing investors with digital access to gold. Around the same time, Paxos's own exchanges, itBit, and Kraken, also began supporting PAXG. By the end of the year, the circulating supply and market capitalization of PAXG continued to grow steadily; PAXG was now more widely recognized as the next-generation version of gold investing.
2021 - Growth Accelerated: 2021 was a breakout year for PAXG. According to data published by Paxos, the PAXG supply surpassed 125,000 tokens just 18 months after launch, and its market capitalization had risen to approximately $240 million. This represented more than fourfold growth in a single year. That same year, Paxos entered the Indian market; WazirX, one of the country's largest platforms, listed the PAXG/INR pair, opening a direct path to "digital gold" for Indian users. On the transparency front, Paxos further strengthened its commitment. Independent auditing firm Withum began publishing monthly reports verifying the gold held in Paxos's custody accounts by comparing it with the circulating token supply. These reports were publicly published. Paxos also announced that the gold held in reserves was protected by Brink's security standards, and that large investors holding sufficient tokens could, if they wish, directly receive LBMA-certified bullion.
2022 - Digital gold moves into the mainstream: By 2022, PAXG was no longer just a hot topic for tech enthusiasts but also institutional investors. Coinbase's listing of PAXG was a significant milestone for investors prioritizing regulatory compliance, especially in the US. Global exchanges like KuCoin, Bitstamp, and Bitfinex also began listing PAXG, further expanding its reach. Throughout that year, the amount of PAXG in circulation steadily increased; in conjunction with global gold price movements, the token's daily trading volume sometimes reached $50–100 million.
2023 - Ecosystem and institutional advancements: By 2023, PAXG's market capitalization was approaching the billion-dollar mark, while the tokenization trend was gaining momentum in the traditional financial world. Gold-backed digital assets were gaining popularity among both institutional and individual investors. Paxos has become one of the industry's trusted infrastructure providers, undertaking high-profile projects like PYUSD, while also forging new integrations and partnerships for PAXG. Many fintech companies have added PAXG to their product lines to offer gold investments to their customers, and some investment platforms have made PAXG trading and custody part of their standard services.
2025: In 2025, PAXG took the step of zeroing out transfer fees on the Ethereum network, reducing gas costs for large token transfers. Its access to exchanges has been expanded: It is scheduled to list on major platforms like OKX in October 2025, increasing liquidity. In line with the rise of tokenized gold assets, PAXG also gained a significant share of the gold-backed digital asset class in 2025, demonstrating increased investor interest and institutional adoption. As of November 2025, the PAXG price remains pegged to $4,200 per ounce of gold.
Why is PAXG Important?
Now, let's take a look at why PAXG is so talked about and why it's so important.
New Uses for Digital Gold
PAXG's true power lies not only in being a gold-backed token, but also in expanding its use cases by moving gold to the blockchain. While traditionally buying, storing, and transferring gold was a hassle, with PAXG, this process takes seconds. Investors can add gold to their portfolios without buying bullion or opening a gold account, using it for either long-term value storage or short-term transactions. This flexibility makes PAXG a powerful alternative in the modern investment world.
A Fast Bridge Between Borders
PAXG offers a seamless transition between fiat and cryptocurrency and the physical and digital worlds. You can either convert PAXG with Turkish Lira to gold or convert PAXG into physical gold bars. Thanks to the redemption options Paxos offers users, PAXG can be converted into real bullion when needed. This bridge function makes PAXG a practical solution preferred by both individual users and institutional investors.
Actions between PAXG/crypto deposit and fiat deposit.
Its structure is suitable for the corporate world
PAXG provides significant operational convenience for gold trading companies, private banking units, or institutions involved in value transfers. While international gold transfers can take days, PAXG transfers are processed in seconds, eliminating logistics, insurance, and storage costs. By integrating PAXG into customer accounts, institutions can offer digital gold services and, through smart contracts, produce gold-backed products. This growing professional use is driving PAXG's growing presence in the financial ecosystem.
Gold Working in the DeFi World
Physical gold doesn't generate income, but PAXG does. Being a token running on Ethereum makes PAXG usable as collateral, liquidity, or a borrowing tool in DeFi protocols. MakerDAO's acceptance of PAXG as collateral is a prime example of this. It can also provide liquidity on platforms like Uniswap and SushiSwap, and PAXG can be borrowed against in some decentralized lending protocols. This is one of the most critical features that "transforms gold from a passive investment tool into an active financial instrument."
Full reserve, full trust model
The most crucial element that solidifies PAXG's value is the 100% verification of its gold reserves. These gold coins, held in Brink's vaults, are checked through monthly independent audits; Paxos proves that each token in circulation matches the gold in the vault. Furthermore, users can see the corresponding PAXG bullion, down to its serial number. Because customer assets are separated from the company's balance sheet, any financial problems Paxos may experience do not affect user assets. This level of transparency and trust makes PAXG one of the most reliable gold tokens on the market.
Paxos fiat/stablecoin conversion
Flexible supply and secure issuance mechanism
PAXG operates on a "mint & burn" model. This means that when someone deposits gold into Paxos, new PAXG is minted; when someone returns their PAXG, the token is burned, releasing the gold. This mechanism ensures that the supply builds naturally and is always tied to physical gold. The low minimum purchase limit (0.01 PAXG) makes gold investment accessible even to small investors.
A token economy supported by transparency
Because PAXG is an ERC-20 token, all data is trackable on-chain. Total supply, burned tokens, transfers—all can be viewed instantly via Etherscan. Paxos also shares reserve information, audit reports, and allocated gold data via real-time APIs, making PAXG a fully open model. This level of transparency both increases trust and is among the reasons institutional investors seeking a regulation-focused product prefer it.
PAXG Developers and Leadership
The team behind PAX Gold is Paxos Trust Company, founded in 2012. The company operates as a regulated trust institution authorized by the State of New York, developing blockchain infrastructure. Paxos's primary goal is to bring traditional finance and digital assets together.
Co-founder Charles Cascarilla is the originator of PAXG's idea. A financier with a Wall Street background, he took the idea of solving the perennial challenges of gold investment with blockchain and transformed it into PAXG. Co-founder Rich Teo is a strong technical player who complements this vision. The entire team focuses on developing digital infrastructures that enhance financial confidence.
Paxos's most striking aspect is its "regulation first" approach. PAXG's launch with NYDFS approval before its launch is a clear example of this approach.
Highlights from the Leadership Team
Paxos' management consists of experienced individuals from the traditional finance and technology worlds. CEO Charles Cascarilla is the leader who sets the company's vision; CTO and co-founder Rich Teo is the technical mind focused on the financial applications of blockchain technology.
The company's compliance department includes former regulatory agency employees, development includes engineers known in the crypto industry, and executives with Wall Street backgrounds. The fact that Paxos's advisory board includes former senators and financial regulators demonstrates the company's commitment to compliance.
This team makes it possible to create a product like PAXG that is both technically sound and legally sound.
The Company's Other Projects
PAX Gold isn't Paxos's only project; on the contrary, the company's product family is quite extensive.
Pax Dollar (USDP) is one of the first USD stablecoins backed one-to-one by the US dollar and compliant with regulations.
Binance USD (BUSD) is a stablecoin launched in partnership with Paxos and Binance.
PayPal USD (PYUSD) is one of the world's first major technology-stablecoin collaborations powered by Paxos's infrastructure.
Paxos also operates its own cryptocurrency exchange, itBit, and offers blockchain-based securities clearing services to many traditional financial institutions. Pilot clearing of some stock transactions on blockchain in the US has been made possible by Paxos's infrastructure.
The company has also initiated efforts to obtain a national bank license from the US Office of the Comptroller of the Currency, demonstrating the ambitious nature of Paxos's long-term vision.
Regulatory Approach
Paxos places a high priority on compliance in all areas of its operations. A New York trust license, full reserve backing of client assets, monthly independent audit reports, and robust KYC/AML processes—all of these ensure Paxos's credibility in the industry.
This approach is directly reflected in PAXG. PAXG is considered one of the most transparent and regulated gold tokens on the market. While competing gold tokens occasionally face reserve and compliance disputes, Paxos's approach makes PAXG a much more reliable option for institutional investors.
Paxos plans to continue collaborating with regulatory bodies in the future and expand its product portfolio in line with global legal frameworks. This stance will remain a cornerstone of PAXG's long-term trust-based journey.
Frequently Asked Questions (FAQ)
Below are some frequently asked questions and answers about PAX Gold:
What is PAXG and how does it work?: PAX Gold (PAXG) is a gold-backed cryptocurrency where each token is equivalent to one physical ounce of gold. PAXG operates on the Ethereum blockchain using the ERC-20 standard and is managed by Paxos. Paxos issues PAXG tokens in exchange for LBMA-certified gold bars held in its vaults. This allows PAXG token holders to own gold digitally. The system works on the principle that Paxos deposits gold into the vault when minting tokens and removes gold from the vault when redeeming them. Ultimately, the amount of PAXG in the market remains identical to the amount of gold in the vaults, and the token value is always linked to the price of gold.
How are reserves stored and verified?: PAXG's gold reserves are stored in high-security vaults such as Brink's in London. This gold is held by Paxos Trust on behalf of customers and is regularly audited. Every month, an independent auditing firm (Withum) examines Paxos's reserve accounts and publishes reports confirming that the number of PAXG in circulation exactly matches the number of gold ounces in the vault. Paxos also offers a query tool for transparency, allowing users to view the serial numbers and details of the gold bars corresponding to the PAXG in their wallet addresses. These mechanisms continuously verify the security and integrity of PAXG reserves.
Which exchanges is it traded on?: PAX Gold is currently listed on many major cryptocurrency exchanges. You can find PAXG in various trading pairs on global exchanges such as Binance, Coinbase, Kraken, KuCoin, Bitstamp, and Gemini. Local exchanges in the Turkish market, such as Paribu and BTCTurk, periodically add PAXG to their listings (subject to change depending on listing status). You can also trade PAXG for other Ethereum-based tokens on decentralized exchanges (such as Uniswap). Because of its high liquidity, PAXG transactions generally occur with low slippage and can be easily traded on many platforms.
Is it possible to buy physical gold with PAXG?: Yes, PAXG holders can convert their tokens into physical gold, but there are practical requirements. Paxos allows users who accumulate a sufficient amount of PAXG (at least 1 oz and multiples thereof) to exchange their tokens for physical gold bars. For example, if you hold 400 PAXG, this is equivalent to exactly 400 oz of gold bars, and you can purchase these bars through Paxos. For smaller amounts, Paxos offers token holders the option to convert their gold to cash or convert it into unallocated gold credits. It is also possible to purchase PAXG in gold bars or coins in certain weights through some partner organizations. However, such transactions generally require additional transaction fees and identity verification. In summary, PAXG is one of the few tokens that offers direct gold delivery, but due to logistical and regulatory requirements, this option is mostly used by large investors.
Which network does PAXG operate on?: PAX Gold initially runs on the Ethereum network and adheres to the ERC-20 standard. Therefore, all Ethereum-compatible wallets (MetaMask, Ledger, Trust Wallet, etc.) and platforms support PAXG. Currently, Paxos has not directly issued PAXG on another blockchain. However, users can use PAXG in other ecosystems by bridging it to different networks. For example, some DeFi bridges allow PAXG to be transferred wrapped in the Binance Smart Chain network. Officially, Paxos operates all of PAXG on Ethereum. Paxos will announce multi-chain support if it becomes available in the future.
What are the advantages for individual investors?: PAXG offers individual investors a secure, low-cost, and highly practical investment option without the hassle of physical gold. Gold is stored in professional vaults, and investors can manage it digitally without paying any storage fees. Investments can be made with very small amounts, PAXG is traded 24/7 on global exchanges, and transfers can be made in seconds. Paxos's regular audits ensure transparency, and unlike physical gold, PAXG can also be used as collateral or yield on DeFi platforms. All of these features make PAXG a versatile and modern "digital gold" alternative for the individual investor.
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