What is PAX Gold?
PAX Gold (PAXG) is an Ethereum token backed by physical gold. One token corresponds to one troy ounce of London Good Delivery standard bullion stored in professional London vaults.
How it works
The issuer operates under financial regulator oversight and monthly confirms that issued tokens match metal reserves. Token holders can verify the serial number of their bullion, and large holders can exchange tokens for physical gold or cash. Token divisibility allows investing with amounts equivalent to fractions of an ounce.
Pros and cons
- Pros: regulated issuer, ownership of specific metal, round-the-clock trading, and divisibility.
- Cons: issuance and transfer fees, dependence on storage infrastructure, and spreads relative to spot gold prices during low liquidity periods.