What is PAX Gold (PAXG)?
PAX Gold (PAXG) functions as a digital receipt for physical gold stored in professional vaults in London. Each token represents direct legal ownership of one fine troy ounce of a London Good Delivery gold bar. Because of this direct backing, its market price does not depend on typical crypto supply-and-demand speculation but instead tracks the international gold spot price.
How does the PAXG mechanism maintain its backing?
The token is issued by Paxos Trust Company, a regulated US financial institution. For every PAXG in circulation, Paxos holds the equivalent amount of physical gold in custody and publishes regular third-party attestations to verify these reserves. When an investor buys a token, the ownership of the already-vaulted gold simply passes to them. Holders who reach a certain balance threshold can even redeem their tokens directly for allocated physical gold bars. Unlike mined cryptocurrencies, new PAXG is only minted when matching gold is secured, and the total supply expands or contracts with user demand.
What does PAXG enable that a physical bar cannot?
The main advantages are divisibility and mobility. Investors can own a fraction of an ounce of gold without needing to buy a whole bar. The token settles 24/7 on the blockchain, allowing for fast, intermediary-free transfers between wallets. It also integrates into decentralized finance, where it can be used as collateral for on-chain loans. While initially launched on Ethereum, PAXG expanded to the Solana network in June 2026, offering users a choice of networks for their transactions.
