(I am not a financial advisor and this is not financial advice.)
Recently, PAX Gold hit my radar when it was announced as part of the "greenlist" of 10 cryptos that can be custodied by licensed businesses. This list was put out by New York regulators in early August 2020. It's a fascinating project, so I made this video about it:
Brief Overview of PAXG
This is an ERC-20 token (built on Ethereum) where one coin equals one troy oz. of fine gold. This is a product by the Paxos Trust Company, which is heavily regulated.
When you buy a coin, it is pegged to a serialized gold bar (or part of one) in their Brink's vaults. This allows exposure to gold investments without investors having to worry about storing their own metal. It's the first digital asset that can be traded in for physical gold at locations around the world, too.
A Couple of Concerns
Of course, I have questions about this newly digitized asset class. For one, we are taking their word that they have the correct amount stored in their vaults. We also don't know if the independent auditors really are independent. It could be the foxes guarding the hen house.
I guess I don't trust the old financial systems that have lied, stolen, and pillaged for so long. PAXG is a new project, so we will see if investors begin to have any problems in the near future.
