At 22:00 on September 5th, Beijing time, American financial technology company Paxos Trust Company (hereinafter referred to as Paxos) announced the launch of the first encrypted gold coin that can be exchanged for physical gold approved by the New York Department of Financial Services (NYDFS)PAX Gold（PAXG）。

In September 2018, Paxos was approved by NYDFS at the same time as Gemini Trust, another financial technology company in the United States, to issue Paxos Standard (PAX), a stablecoin anchored 1:1 with the U.S. dollar. One year later, Paxos launched PAXG, an encrypted gold coin that can be anchored with gold.

PAX Gold is a digital asset in which one token represents one troy ounce of London Good Delivery gold bars held in specialized vaults in London. Any holder of PAX Gold owns corresponding gold held in custody by the Paxos Trust Company. Therefore, the value of PAX Gold will track the real-time market price of gold.

Each PAXG token represents 1 troy ounce of physical gold on a specific serialized bar. These tokens can be exchanged for a single gold bar if the customer has enough PAXG to represent an entire bar. Ownership, on the other hand, can be divided into up to 18 decimal places, allowing customers to own very small quantities of high-quality gold for the first time.

PAXG holders can visit the Paxos website to look up the serial numbers and physical characteristics of their gold held in vaults. Just enter the Ethereum address holding PAXG tokens.

According to the introduction of the PAX Gold white paper, the original intention of Paxos to decide to launch PAXG is to solve some pain points in the current gold market.

Paxos CEO and co-founder Charles Cascarilla said: "Physical gold is a cumbersome and outdated investment in a digitized global financial system; compared to other investments, physical gold is difficult to trade, divide, move or utilize. Easily trade gold derivatives - ETFs, futures and bearer gold, but these derivatives are 'representatives' of gold without legal ownership of physical gold and limited availability. Via uncertified Gold purchased in retail stores is not only expensive, but also risky due to the unverified quality and source of gold.” To this end, Paxos launched PAXG to solve the above problems.

Although the unit price of 1PAXG is not low, Paxos stipulates that the minimum investment amount of PAXG is 0.01PAXG (about 15 US dollars), retail investors can also participate, and any individual or institution can buy PAXG.

PAXG is an Ethereum token built according to the ERC-20 protocol, so it is compatible with Ethereum wallets that accept ERC-20 tokens, and can be launched on exchanges, wallets, lending platforms, and other encrypted products. Although PAXG is currently only available on Ethereum, it may be available on other chains if there is a huge market demand in the future.

Paxos creates and burns PAXG tokens on demand. Paxos account holders can exchange PAXG for USD or unallocated gold in a London-delivered unallocated gold account and vice versa. Customers can exchange their tokens for physical gold bars if they hold more than 430 ounces of PAXG.

Paxos charges token creation and destruction fees based on the quota-based fee schedule published on the official website. The minimum purchase amount on the Paxos platform is 0.01 PAXG (plus a minimum creation fee of 0.02 PAXG).

Paxos has engaged US audit firm Withum to independently verify at a given point in time that the total supply of PAX Gold tokens is consistent with the amount of gold (in troy ounces) held in UK escrow on behalf of Paxos. Withum conducts certain month-end attestation audits of these accounts in accordance with the standards established by the AICPA. The monthly assurance audit report can be viewed on the Paxos website.