New York-based firm Paxos is making waves in the world of cryptocurrency, as it officially introduces a cryptocurrency backed by, and redeemable for physical gold. Dubbed PAX Gold (Ethereum ticker: PAXG), the new token digitizes the bullion in a regulated manner by backing every PAXG by one fine troy ounce of gold held in a London vault.
The company has engaged Withum, a top-25 auditing firm in the US, to periodically verify that Paxos Trust Company holds gold reserves that cover the number of issued and outstanding PAX Gold tokens in circulation.
PAX Gold also offers full public auditability of the chain of custody with each token ownership status is tracked accurately on the Ethereum blockchain. Users have real-time transparency, as well as having an independent auditor to ensure authenticity. The physical gold is also redeemable at any time.
FBS Gives Away Signed FC Barcelona Jerseys for Playing Penalty SimulationGo to article >>
Charles Cascarilla, CEO and Co-Founder of Paxos, further explains: ” While it’s easy to trade gold derivatives – ETFs, futures and unallocated gold – these are synthetic representations, not legal ownership of physical gold, and have limited accessibility. Gold purchased through unaccredited retail outlets is not only expensive, but also risky as the quality and provenance of the gold are unverified.”
He continued, “PAX Gold solves these fundamental challenges. It’s as easy to trade as ETFs or bitcoin, is extremely mobile and divisible, and it also gives holders ownership to the highest quality gold in the world.”
Tokenized gold is already here
Even though Paxos can provide some advantages over other issuers as a regulated trust company, similar projects have already failed to provide a long-lasting solution for tokenized gold. The latest in a string of companies pulling the plug on their bullion-backed coins has come from Goldmoney Inc. (TSX:XAU), one of the biggest precious metals storage firms. Earlier this year, the company has pulled out of the vaulted cryptocurrency service without revealing the root of its decision to exit the industry.
However, Paxos’ status as a licensed financial services company in the US allows it to potentially offer tokenized securities and also to access the traditional banking system. The unique position has enabled the firm to join forces with the world’s most influential crypto exchange, Binance, to secure the NY regulator’s approval to launch a new USD-backed stablecoin.