Paxos launches gold-backed stablecoin

With Paxos' PAX Gold, there's now a new member in the long list of stablecoins.

Paxos' PAX Gold brings a new member to the long list of stablecoins. The digital coin is backed by gold.

Physical gold on the blockchain. That's the headline of a press release Paxos published on September 5. After the New York State Department of Financial Services (NYDFS) signed off, the gold-backed token PAX Gold is hitting the market.

In the press release, Paxos promises its customers mobility, flexibility and "access to the $9 trillion gold market." In detail, PAX Gold is an ERC20 token.

Each token is also backed by one ounce of fine gold. The corresponding bars are stored in Brink's vault in London. So the value of PAX Gold is directly tied to the real-time market price of gold at any moment.

PAX Gold as a new form of gold trading?

Additionally, Paxos gives buyers a claim on the physical equivalent of their crypto coins. On Paxos.com, traders can redeem their tokens for fiat or even physical gold. At any time they can view the serial number, size, weight, and other details of their gold bars. According to Charles Cascarilla, Paxos' CEO and co-founder, this concept solves the headaches of trading physical gold. "By putting gold on the blockchain, we democratize access to it," he says.

Paxos Trust Company is an American fintech best known for the dollar-pegged PAX Standard token. But the company has long planned to expand. Paxos has announced gold-backed tokens several times. Also crypto projects backed by gold or silver are lining up.

Metal-backed coins are growing in popularity. This trend also aligns with the fundamental tokenization of assets, which includes the tokenization of real estate or land.