What Is PAX Gold (PAXG)? Backing, Risks, and Where to Buy
TL;DR
- • 1 PAXG = 1 troy oz of physical gold, held in LBMA vaults in London by Paxos
- • Allocated, bar-level ownership - you can look up the specific bars backing your tokens on-chain
- • ~460,000-470,000 oz in custody in 2026, market cap around $2 billion
- • Issued by Paxos Trust Company, regulated by NYDFS and chartered under the OCC
- • Trades 24/7 including weekends when traditional gold markets are closed
- • Physical redemption minimum is 430 PAXG (~$1.9M) - most holders exit via exchange
PAX Gold (PAXG) is a digital token that puts physical gold on the blockchain - each one backed by a real London Good Delivery gold bar held in a vault in London. It lets you hold and trade gold around the clock without ever touching a vault or a broker. Here's how it works, what to watch out for, and where to buy it.
Each PAXG token represents one fine troy ounce of a 400-ounce London Good Delivery gold bar held in custody by Paxos Trust Company. Ownership is allocated, meaning your tokens are tied to specific identifiable bars rather than a share of a pool. That's the core proposition: real gold, on a blockchain, issued by a regulated trust company.
As of 2026, roughly 460,000 to 470,000 troy ounces sit in custody behind PAXG, with a market value around $2 billion. This guide covers how the backing works, what the real risks are, and where to buy at the best price.
| Ticker | PAXG |
| Issuer | Paxos Trust Company, N.A. |
| Backing | 1 PAXG = 1 fine troy ounce of London Good Delivery gold |
| Custody | LBMA-accredited vaults in London (Brink's) |
| Network | Ethereum (ERC-20) |
| Launched | September 2019 |
| Physical redemption | Yes - minimum 430 PAXG (one full bar) |
How PAXG Works
When you buy PAXG, Paxos purchases and vaults London Good Delivery gold on your behalf. New tokens are minted only when new gold enters custody; tokens are burned when holders redeem. Supply tracks actual gold held - no fixed cap, no algorithmic backing.
Allocated ownership is what distinguishes PAXG from many gold products. Paxos provides an on-chain lookup tool that lets eligible holders view bar details - serial numbers, weight, purity - tied to their holding. A gold ETF gives you a share of a pool. PAXG gives you a claim on specific metal.
A practical note on fees. Paxos charges no storage or custody fees for holding PAXG - a real advantage over physical gold and many ETFs. There are minting and redemption (creation/destruction) fees on a tiered, volume-based structure, but day-to-day holders pay nothing to store. One smaller catch worth knowing: Paxos charges a $2/month account fee if you keep a non-zero balance with Paxos directly and there's been no activity for twelve months or more. Holding PAXG in your own wallet or on an exchange avoids that.
PAXG runs on Ethereum as an ERC-20 token, so it works with standard Ethereum wallets and DeFi protocols. As with any Ethereum asset, network gas fees apply when you move it on-chain, and they can be significant during periods of congestion. When withdrawing from an exchange, make sure you're using the Ethereum network so your tokens don't end up stranded.
One genuine advantage over traditional gold: PAXG trades 24/7. The London gold market closes Friday evening and reopens Sunday evening. During that window, tokenized gold like PAXG becomes one of the only ways to act on gold - which is why tokenized gold prices are increasingly used as weekend gold price references.
Is the Gold Actually There?
Yes - verified by monthly third-party attestations. Paxos publishes monthly reserve reports on PAXG, and attestation reports posted since February 2025 are issued by KPMG LLP, an independent accounting firm. You can check current figures directly on Paxos's transparency page rather than relying on any article's snapshot.
The honest nuance is the difference between an attestation and a full audit:
An attestation is a point-in-time check - an independent firm confirms reserves match tokens on a specific date. A full audit examines controls and processes over time, which is more rigorous.
PAXG's reserves are verified by monthly attestations from a major accounting firm, and Paxos operates as a regulated trust company with its gold held in segregated, bankruptcy-remote custody. That's a stronger transparency and regulatory posture than most tokenized assets - but an attestation is still a point-in-time check rather than a continuous full audit, which is worth understanding.
The Real Risks
Gold price risk. PAXG is gold. If the gold price drops 20%, your PAXG drops 20%. This is not a dollar stablecoin despite sometimes being described as one. PAXG's price moves with the gold market, which has been volatile - it traded above $5,000 at points in early 2026 and well below that at other times.
Issuer and custody risk. You are trusting Paxos to hold the gold it claims and Brink's to vault it. Paxos's NYDFS regulation and OCC charter, segregated accounts, and monthly attestations are meaningful safeguards - but you're still accepting counterparty risk on the issuer and custodian.
Redemption isn't for retail. Technically you can redeem PAXG for physical gold. Practically, the minimum is a full London Good Delivery bar - 430 PAXG, well over $1.5 million at recent prices, with delivery only to vault facilities in the UK. For most holders, the exit is selling on an exchange or using Paxos's cash redemption. Don't buy expecting to convert a few tokens into something you can hold. (Some retail partners offer fractional redemption into coins, but that's separate from Paxos's own bar redemption.)
Smart-contract and exchange risk. PAXG is an ERC-20 token, so smart-contract bugs and exchange counterparty risk if you leave tokens on a platform are standard crypto risks you're taking on. Self-custody in your own wallet reduces the exchange risk but puts key security on you.
Single-network concentration. PAXG lives on Ethereum. That means full DeFi compatibility, but also exposure to Ethereum gas costs and no native multi-chain redundancy.
Where to Buy PAXG
PAXG trades on Bybit, OKX, Binance, Bitget, Kraken, Coinbase, and MEXC, among others. Prices vary between platforms once you account for the spread and trading fees - checking before you buy takes 30 seconds and can save real money.
GoldSight tracks live PAXG and XAUT prices across all major exchanges:
→ See live prices and find the cheapest exchange
Final
PAXG is a legitimate, well-regulated way to hold gold on-chain. The backing is real, allocated to specific bars, verified by monthly attestation, and issued by a trust company under US regulatory oversight. The 24/7 trading, zero storage fees, and fractional ownership solve real problems that physical gold and most ETFs don't.
The trade-offs are real but modest: attestation-based rather than continuous-audit transparency, Ethereum-only network with its gas costs, and redemption that's practically out of reach for retail. For most retail buyers these aren't dealbreakers - but they're worth understanding before you commit.
If you've decided tokenized gold is the right exposure, the main question left is usually which exchange has the best price today.
For informational purposes only. Not financial advice. GoldSight may earn a commission if you sign up through links on this page. Tokenized gold carries risk, including loss of value.