Paxos, a New York cryptocurrency company known for selling a so-called stablecoins pegged to the U.S. dollar, is getting into precious metals. On Wednesday, it announced a product called PAX Gold, which lets customers buy a digital token that is backed by one troy ounce worth of gold held in a London vault.
The company says the token provides customers with actual ownership of the gold in question—Paxos will even provide the serial number of the corresponding gold bar in London. Customers will also be able to buy and sell Pax Gold tokens on various blockchain networks, which will register the reassign the ownership rights to the gold. Paxos also notes that, since it is a regulated trust company, clients’ gold is totally secure, including in the event of bankruptcy.
The gold token is the first of its kind, which raises the question of why anyone would want to own it in the first place. After all, gold bugs have plenty of options to get exposure to the yellow metal—from ETFs to futures contracts to physical holdings. Why…