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Paxos launches stablecoin PAXG, 'first asset redeemable for physical gold'

Image Credit: Cryptopys

Fri, 06 Sep 2019, 06:53 am UTC

Paxos Trust Company, a New York-based stablecoin operator, has launched PAX Gold (PAXG), a gold-backed Ethereum token.

The company said that PAXG is the “first crypto-asset redeemable for physical gold.” In addition, the New York State Department of Finance Services (NYDFS) has approved the issuance, confirming that it is the “first gold-backed virtual currency in New York State.”

As per a press release, one PAXG token will be supported by one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London. Users who own the tokens can reportedly own the gold it represents. However, the tokens can be transferred like other ERC-20 tokens, which is simpler than shipping actual gold.

In a digital and global financial system, owning physical gold is a cumbersome, outdated investment; it's not easy to trade, divide, move or leverage against other investments,” Charles Cascarilla, Paxos CEO and Co-Founder, said.

Paxos said that although it is easy to trade gold derivatives, exchange-traded funds, and unallocated gold, these are mere “synthetic representations” and none offer titled ownership to actual gold.

Gold purchased through unaccredited retail outlets is not only expensive, but also risky as the quality and provenance of the gold are unverified,” he said.

With the new service, users can convert tokens to and from fiat currency or unallocated gold and redeem tokens for physical gold bars. In addition, token holders can reportedly search for relevant details of their gold bars, including serial number, brand code, gross weight, fineness, and fine weight.

Cascarilla also told CoinDesk that Paxos plans to expand its list of global partners from the traditional commodities to make sure users can claim real gold regardless if they are based outside London or New York.

Describing the latest move as a “groundbreaking product in the history of gold,” Cascarilla said, “You can own that gold but you don’t have to pay a custody fee, and you can send it around the world 24 hours a day, 7 days a week.”

Other than the PAXG, Paxos in partnership with cryptocurrency exchange Binance announced that they will launch a USD-backed stablecoin BUSD, which has been approved by the New York State Department of Financial Services (NYDFS). The recent approval marks a critical step towards long-term stability in global crypto markets.

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