Paxos, a famous stablecoin operator, has recently decided to launch its newest asset: PAX Gold (PAXG). This Ethereum-based token is set to be launched soon and it will be the first cryptocurrency to be fully backed by gold.
According to the New York State Department of Financial Services (NYDFS), this will also be the first gold-backed crypto to be officially present in the New York state, which is a huge victory for the company.
Each token will be backed with a single fine troy ounce of gold from London Good Delivery. The institution will store all the gold in London, too. The idea is that the tokens will represent an easy way to move the gold around with fewer costs and more advantages.
In order to keep the value of the gold constant, fees will be charged upon creation, destruction and transaction of the token. According to Paxos CEO Charles Cascarilla, owning physical gold is very cumbersome and not really worth it when you have some other solutions. What the company wants now is to be the provider of these solutions.
It is easy, according to the CEO, to use exchange-traded funds (ETFs) and futures for exchanges, but they are not really legal ownership of the assets, so they are also not as good as actually holding it via cryptocurrencies.
Each token can be transacted by actual gold or fiat currency when redeemed with the company. Each user can also look up the information about the gold that is being held in storage, too.
In related news, Paxos has recently started a partnership with Binance in order to launch a new stablecoin for the company. The new token is set to be called Binance USD (BUSD) and will become the official stablecoin of the famous exchange.