PAXG in Focus: The Gold-Backed Token Changing the Game

PAX Gold (PAXG) is a token backed by physical gold: each token corresponds to one fine troy ounce of London Good Delivery gold held in vaults.

Key Takeaways

• PAXG is issued by Paxos Trust Company. Since December 2025 the company operates under a national trust charter supervised by the OCC, having converted from its previous NYDFS limited-purpose charter — a change of federal versus state oversight
• Reserves are verified through monthly attestations by an independent accounting firm, currently KPMG. An attestation is not a full audit: it confirms holdings at a point in time against stated criteria, which is meaningful but weaker than an audit opinion
• Redemption for physical metal requires a full London Good Delivery bar — on the order of 400 ounces — not a single token. Holders of smaller amounts can sell or transfer tokens, but cannot take delivery of metal
• Compared with XAUT, PAXG’s distinguishing feature is regulatory supervision and the granularity of reserve reporting. Both track the gold price and both carry issuer risk

Issuer and Regulatory Status

PAXG is issued by Paxos Trust Company, National Association. Paxos originally operated under a limited-purpose trust charter from the New York State Department of Financial Services, first granted in 2015. Its regulatory status changed materially after the OCC conditionally approved its conversion to a national trust bank in December 2025. Paxos Trust Company, N.A. is now listed as an OCC-supervised trust bank, placing its US-based activity under federal rather than state-level oversight.

Reserves and How They Are Verified

The gold backing PAXG is held in LBMA-accredited vaults, historically through Brink’s in London. Reserves are verified monthly by an independent accounting firm — currently KPMG — which publishes attestation reports.

On bankruptcy protection: Paxos states that the gold backing PAXG is held separately from company assets. The original article included the right caveat — that extreme legal scenarios may still involve litigation or claims — and that caveat is retained. Segregation is a legal structure, not an absolute guarantee, and its effectiveness would be tested only in an actual insolvency.

PAXG launched as an ERC-20 token on Ethereum, divisible to 18 decimal places, transferable to any compatible wallet. In June 2026, Paxos also brought PAXG to Solana via Sunrise DeFi, extending it beyond its original single-chain design. Paxos charges a fee on token creation and redemption, and on-chain transfers incur network gas costs, which vary with congestion and the chain used.

Ownership terms deserve precision. Holding PAXG represents beneficial ownership of London Good Delivery gold held by Paxos, with allocation to specific bar information available through the issuer. The practical limit is redemption: converting PAXG into allocated gold requires at least 430 PAXG plus applicable fees per London Good Delivery bar. Smaller holders can still sell or transfer the token, or convert it through Paxos into fiat currency or unallocated gold, subject to platform terms and fees.

PAXG and Other Gold-Backed Tokens

PAXG is one of several gold-backed tokens, but the products differ in issuer structure, redemption mechanics, jurisdiction, and market depth.

The main difference is not only the amount of gold behind each token. For users, the more practical comparison is issuer oversight, redemption size, jurisdiction, exchange availability, and whether there is enough market depth to enter or exit without relying on one narrow venue.

Price Behavior

PAXG tracks the spot price of gold, so it moves with the gold market rather than with crypto-specific sentiment. That is a structural property, not a guarantee of stability: gold itself has extended drawdowns, and the token inherits them. PAXG also trades at a premium to spot, since issuer fees are embedded in the price.

Risks

• Issuer and custody risk. The token is a claim on a company holding metal through a custodian; its value depends on both performing as stated
• Gold price risk. Gold is not a stable asset and can decline for extended periods
• Premium and fees. Creation, redemption, and gas costs apply, and the token trades above spot
• Regulatory reclassification. Сhanges in US regulation could affect how the token is issued and traded
• Attestation scope. Monthly attestations confirm holdings against stated criteria; they are not audit opinions, and their scope is worth reading rather than assuming

FAQ

What backs PAXG?

Each token corresponds to one fine troy ounce of London Good Delivery gold held in LBMA-accredited vault storage. Paxos publishes bar information and monthly attestation reports.

Can PAXG be redeemed for physical gold?

Only at scale. Physical delivery requires a full London Good Delivery bar, on the order of 400 ounces. Smaller holdings can be redeemed to unallocated gold or fiat through Paxos, or simply sold on the market.

How can reserves be verified?

Paxos publishes bar data and monthly attestation reports from an independent accounting firm. Note the distinction: an attestation confirms holdings against stated criteria at a point in time, which is weaker than a full audit opinion.

What fees apply?

Paxos charges fees on token creation and redemption; on-chain transfers cost Ethereum gas. There is no separate storage fee, though costs are reflected in the token’s premium to spot.

How does PAXG differ from physical gold?

PAXG is a transferable claim on gold held by an issuer; physical gold is held directly with no counterparty. The trade-off is between issuer exposure and the practical burden of storage, insurance, and transport.