Paxos Gold (PAXG) is a gold-backed
digital asset designed to make investment-grade bullion easier to hold, move, and integrate with crypto markets. Instead of tracking gold synthetically, PAXG is structured to represent direct ownership of physical,
allocated gold, while using Ethereum’s
token standard to provide
wallet portability and
on-chain transferability.
[1]Background and origin of Paxos Gold
PAXG is issued by Paxos, a financial technology company that set out to modernize
market infrastructure by bringing traditional assets onto blockchains in a
regulated way. Paxos was founded by Charles Cascarilla and Rich Teo, originally connected to the itBit
exchange, and later evolved into a broader infrastructure provider focused on digitizing and settling assets.
[2]A central part of PAXG’s positioning is regulatory oversight through Paxos
Trust Company, a New York limited purpose trust company supervised by the New York State Department of Financial Services (NYDFS). That trust structure is intended to support clearer rules around
custody, issuance, and customer protections compared with
unregulated commodity tokens.
[3]Token structure and 1:1 physical gold backing
PAXG is implemented as an
ERC-20 token on Ethereum, which means it can be held in standard Ethereum wallets, transferred peer-to-peer, and integrated into exchanges, custodians, and DeFi applications that support ERC-20 assets.
[1]The core mechanism behind its 1:1 backing is a mint and burn model tied to physical inventory. New PAXG is minted when corresponding gold is allocated and held in custody, and tokens are burned when holders redeem and the underlying gold is released from the backing pool. Each token is designed to correspond to one fine troy ounce of a London Good Delivery gold bar, and Paxos provides token holders with a way to verify the specific bar attributes associated with their holdings, such as refiner and serial information, reinforcing the “allocated” framing rather than a pooled or fractional reserve claim. [1]
Custody is handled through professional vaulting arrangements commonly used in the bullion market, and Paxos publishes regular reporting intended to evidence that outstanding tokens are matched by the appropriate amount of gold held. These reports function as third-party attestations of backing and are a key distinction versus tokens that rely only on issuer statements. [4]
Use cases, integrations, and redemption options
PAXG’s utility comes from combining gold exposure with crypto-native transfer and composability. For investors, it can serve as a way to hold gold without arranging personal storage, while still retaining the ability to move value globally using Ethereum transactions. Because the token is divisible, it can represent smaller increments of gold ownership than traditional wholesale bars, and it can be traded in venues that support ERC-20 assets. [5]
In crypto markets, PAXG is often used as a collateral-like
asset or
portfolio diversifier where gold exposure is desired in an on-chain format. Its ERC-20 design allows integration with wallets, exchanges, and certain lending or
liquidity protocols, subject to each
platform’s listing and risk policies. This
interoperability is a practical differentiator compared with holding physical bullion directly, which is not readily transferable or programmable.
Redemption is a defining feature of PAXG’s structure. Holders can typically exit by selling the token on supported exchanges, or by redeeming through Paxos pathways that convert the token claim into physical gold or a
cash equivalent, depending on eligibility, jurisdiction, and minimum redemption requirements. The
intent is that PAXG holders are not confined to secondary-market liquidity alone, because the token is designed to remain anchored to physical gold through issuance controls, custody, and ongoing attestations.
[1]