Editor's note: This article is from 36 Krypton strategic cooperation blockchain media "Odaily Planet Daily" (public ID: o-daily, APP download)
At 22:00 GMT on September 5, U.S. fintech company Paxos Trust Company (hereinafter referred to as Paxos) announced the launch of PAX Gold (PAXG), the first crypto-gold coin approved by the New York Department of Financial Services (NYDFS) that can be exchanged for physical gold.
In September 2018, Paxos was approved by the NYDFS at the same time as another US fintech company, Gemini Trust, to issue Paxos Standard (PAX), a stablecoin that is 1:1 anchored to the US dollar. A year after that, Paxos launched PAXG, a crypto gold coin that can be anchored to gold.
PAX Gold is a digital asset where one token represents one troy ounce of London Standard Delivery gold bullion held in specialized vaults in London. Any holder of PAX Gold owns the corresponding gold under the custody of the Paxos Trust Company. Therefore, the value of PAX Gold follows the real-time market price of gold.
Each PAXG token represents 1 troy ounce of physical gold on a specific serialized gold bar. If a customer owns enough PAXGs to represent an entire gold bar, they can redeem those tokens for a gold bar. Ownership, on the other hand, can be divided into up to 18 decimal places, allowing customers to own very small amounts of premium gold for the first time.
PAXG holders can visit the Paxos website to look up the serial numbers and physical characteristics of the gold they own and keep in their vaults. Simply enter the Ether address where the PAXG tokens are held.
According to the PAX Gold whitepaper, Paxos decided to launch PAXG initially to address some of the pain points that currently exist in the gold market.
Physical gold is an unwieldy and outdated investment in a digitized global financial system; it is difficult to trade, divide, move or utilize compared to other investments," said Charles Cascarilla, CEO and co-founder of Paxos. While it is now easy to trade gold derivatives - exchange-traded funds, futures and bearer gold - these derivatives are gold 'reps' that do not have the legal ownership of physical gold and have limited accessibility. Gold purchased through uncertified retail outlets is not only expensive, it can also be risky due to unverified quality and origin of the gold." In response, Paxos launched PAXG to address the above issues.
Although the unit price of 1 PAXG is not low, Paxos has set a minimum investment of 0.01 PAXG (about $15) for PAXG, which is also available to retail investors and can be purchased by any individual or organization.
PAXG is an Ether token built according to the ERC-20 protocol, and as such is compatible with Ether wallets that accept ERC-20 tokens and can be live on exchanges, wallets, lending platforms and other crypto products. While PAXG is currently only available on Ether, it may be made available on other chains if there is great market demand in the future.
Paxos creates and destroys PAXG tokens on an as-needed basis.Paxos account holders may exchange PAXG for U.S. dollars or for bearer gold in a London Settlement Bearer Gold Account and vice versa. If a client holds more than 430 ounces of PAXG, they can exchange their tokens for physical gold bars.
Paxos charges a token creation and destruction fee based on a tiered fee schedule published on the official website by amount.The minimum purchase on the Paxos platform is 0.01 PAXG (plus 0.02 PAXG minimum creation fee).
Paxos has engaged Withum, a U.S. auditing firm, to independently verify at a specified point in time that the entire supply of PAX Gold tokens corresponds to the amount of gold (in troy ounces) held in third-party escrow in the U.K. on behalf of Paxos.Withum performs specified month-end forensic audits of these accounts in accordance with the standards established by the AICPA. Monthly forensic audit reports are available on the Paxos website.
