In recent times, the global crypto market capitalization has crossed the $3 trillion mark as millions of investors are trading in crypto assets.
Despite the rising popularity of the crypto market and crypto prices soaring, various investors are still prioritizing stability over profit. This increases the demand for stable crypto assets that provide high and risk-free returns.
When considering stable assets for trading, gold, the “king of precious metals,” often comes to mind due to its role as a store of value and resilience during economic uncertainties.
Gold is making headlines again in 2025, hitting new all-time highs driven by a surge in safe-haven demand. Gold has crossed the remarkable milestone of $3,000 an ounce for the first time. This marks the rising interest of institutional investors in tokenized gold as a trading asset, and PAX Gold dominates this space.
It represents physical gold as its value is tied directly to the real-time market value of that physical gold. It tends to track the price of gold, offering a more stable alternative compared to other volatile cryptocurrencies.
PAX Gold incorporates the power of blockchain technology with physical gold to provide users with the facility to trade gold-backed crypto assets efficiently without the need to store and handle gold assets.
In this article, we will explain PAX Gold (PAXG) in detail, how it works, the difference between PAXG tokens and Gold ETFs, and much more.
What is PAX Gold?
PAX Gold (PAXG) is a digital representation of physical gold. It is a real gold-backed cryptocurrency token. It uses blockchain technology to tokenize gold and allow market players to trade it without actually owning physical gold.
Each PAXG token is linked to a 1:1 ratio to one troy ounce (t oz) of a 400-ounce London Good Delivery gold bar stored in Brinks Security Vaults in London.
PAX Gold investment is different from traditional gold investment, where it permits investors to buy, sell, and trade gold without storing it. PAXG was initially an ERC-20 token on Ethereum, but it has now expanded to BNB Chain and Solana as well. It offers liquidity and hassle-free transactions across the global market.
With fractional ownership, PAX Gold makes gold accessible to a global audience. A trader can hold gold without buying the entire gold bar, which democratizes gold investment.
PAX Gold bridges the gap between traditional finance and digital finance by providing a modern solution for preserving wealth in a digital era.
Who Created PAX Gold?
PAX Gold was created by Paxos Trust Company, a financial institution and tech firm based in New York. The company was founded by Charles Cascarilla and Richard Teo and Charles Cascarilla, a former analyst at Goldman Sachs in 2012.
Other than PAX Gold, they also created PAX Dollar (USDP0 stablecoin which is a digital United States dollar and works in the same manner as PAX Gold.
How Does PAX Gold Work?
As discussed above, PAX Gold is a cryptocurrency token available to trade on multiple crypto exchanges like Binance, Bybit, and others. It can also be traded on decentralized exchanges and can be used as collateral on decentralized finance (DeFi) platforms.
PAXG tokens are backed by the gold bars accredited by the London Bullion Market Association (LBMA) and stored in secure vaults. PAX Gold does not charge any custodial or storage fees from its users, but only a minimum 0.02% transaction fee.
Both PAX Gold and its holding company, Paxos Trust, are under the legal jurisdiction of the New York Department of Financial Services (NYDFS). Further, it protects the consumer and the company’s assets independently, which ensures that the customer is secured in the event of bankruptcy.
PAXG has a monthly audit feature where a third-party accounting firm ensures that its gold reserves match the supply of PAXG tokens. In addition, Paxos’ developers conduct regular smart contract audits to find any vulnerabilities in the network.
PAX Gold, a Real Gold?
PAX Gold is a tokenized gold that functions on the blockchain ecosystem. It transforms and represents the physical gold bars into a tradeable cryptocurrency. The supply of PAXG tokens is based on the number of gold bars stored by its holding company, Paxos Trust.
PAX Gold can be regarded as real gold (but not in physical form) as each PAXG token has a serial number that matches those of individual gold bars, which are stored in secure vaults and are under legal jurisdiction.
PAXG Token Price
PAXG is the native token of PAX Gold. Currently, it is trading at $3,037.11 with a market cap of $674 million as of April 7, according to coinmarketcap. Its total and circulating supply is 221.95k PAXG, and it could be traded across hundreds of markets.
On April 3, 2025, PAX Gold reached an all-time high of $3,191.73, incidentally a day after U.S. President Donald Trump announced tariffs against two dozen nations, thereby triggering a global market onslaught.
PAX Gold Vs Gold ETFs
PAX Gold is sometimes confused with Gold exchange-traded funds (ETFs). However, it is different from gold ETFs in many ways.
| PAX Gold | Gold ETFs | |
| Links | Paxos Gold is directly linked with a stored gold bar by its holding company and can be redeemed into physical gold. | Gold ETFs are not directly linked with a gold bar and cannot be redeemed into physical gold. |
| Represents | PAXG represents the tokenized form of physical gold bars. | Gold ETFs only track the price of gold. |
| Exists | PAXG is a crypto token that exists on multiple blockchains. | Gold ETFs do not exist on a blockchain network and only exist on a contract paper. |
| Use Cases | Other than converting it into physical gold or fiat money, it can also be used to buy goods and services. | Gold ETFs can only be converted into fiat currency and can’t be used to buy goods and services. |
Also Read: BlackRock, SEC Meet Privately to Discuss Next Step of Crypto ETFs
Why to Buy PAX Gold?
Below are some reasons that answer why buying PAX Gold is preferred over acquiring real gold:
Trusted Issuer
PAXG was launched by New York-based tech firm Paxos Trust Company, which is governed and authorized by NYDFS. It has a history of developing and managing stablecoins, including Paxos Standard (PAX) and Huobi’s HUSD stablecoin.
Fully Collateralized and Redeemable
PAXG tokens are backed by real gold bars at a 1:1 ratio stored in secure LBMA vaults in London. These tokens can also be redeemed for physical gold at any time.
Stable Crypto Investment
PAX Gold is based on the Ethereum blockchain and provides global accessibility to own and trade gold to those who want to diversify their crypto portfolio with stable assets. It also works as a hedge against market volatility.
Fractional Ownership
Gold is an expensive asset, and buying a gold bar is not possible for every investor. Hence, Paxos allows its users to acquire fractional ownership of London Good Delivery gold bars with a minimum purchase of 0.01 PAXG (currently valued at around $30.93).
How to Redeem PAXG with Physical Gold?
Paxos Trust allows the holders of PAXG tokens to convert their tokens into physical gold. To redeem PAXG into physical gold bars, a holder must initiate a sell request through the Paxos wallet dashboard on the PAX Gold page. For redemption of PAXG into gold bars, you will need to have a minimum of 430 PAXG plus fees, given that London Good Delivery gold bars range from 370-430oz.
Conclusion
PAX Gold combines the stability of physical gold with advanced blockchain technology. It helps investors by offering a gold investment without the need to manage and store physical gold.
With features like real-time tracking, gold-backing, fractional ownership, legitimacy, and many others, PAXG provides a blockchain-based solution that combines the stability of a traditional commodity with the speed and flexibility of crypto assets.
