Pax Gold (PAXG) is an ERC-20 token created by Paxos that gives ownership rights to physical gold from producers on the London Bullion Market Association (LBMA) accredited London Good Delivery list. The company retains relationships with Brink’s bullion vaults in London for storage and StoneX for trading physical gold.
Pax Gold prices follow that of spot gold because every PAXG token equals one troy ounce of gold. Pax Gold is 100% collateralized by physical gold, and tokens are redeemable for physical gold. This means that when you buy Pax Gold tokens, you receive rights to gold allocated and stored in your name and not an IOU for fiat or gold like many other gold investment vehicles, including ETFs, CFDs, and other digital gold.
Key Concepts of Pax Gold
Allocation – Pax Gold token buyers are buying rights to gold held in professionally kept investor-only vaults. The token offers investors a safer way to hold physical gold than keeping it in the home and faster ways to trade with it by executing transactions through the Ethereum blockchain or Ethereum network. Investors save on storage and transportation fees and gain peace of mind by knowing that their investment is custodied by Pax Gold and that they have access to liquid markets when needing to make a transaction.
Redemption – Pax Gold tokens can be exchanged for LBMA accredited London Good Delivery physical gold — meaning that delivered gold will always meet the highest standards and have a minimum purity of 99.5%. Tokens are also redeemable for unallocated gold entitlements and fiat through com. Customers that purchase fractional token amounts are also eligible for physical and other types of redemption.
Regulation – Pax Gold is regulated by the New York State Department of Financial Services. Its registration ensures customers that the company will always operate at high standards to remain compliant and continue its offerings.
Associated Costs and Risks – Pax Gold may carry low fees and lower risk compared to other gold investing vehicles. The allocation model reduces risk because customer gold is purchased and held as more people buy tokens. To own physical gold in an IRA, holders need to pay someone to store it, and due to Pax Gold’s current relationships and fee model, storage is free. Pax Gold takes care of storage fees by charging a token destruction or creation fee based on the volume of gold involved in the transaction. Paxos also charges a 0.02% fee for transactions and Ethereum gas fees.
Decentralization and Digitization – Pax Gold operates on an open blockchain, meaning that no single group can gain control of the asset. The digital format makes physical gold easy to trade, hold, and store (because storage is provided), and the digital and physical trading mechanisms are liquid.
Pax Gold vs. Tether Gold
Tether Gold (XAUt) is similar to Pax Gold because the token is backed by physical gold. But Pax Gold outshines XAUt in many other departments. XAUt has a high minimum order amount and odd rules for redeeming tokens for gold.
For example, to redeem tokens, you need 430 XAUt tokens, equal to one bar of gold, a verified TG Commodities Limited account, and an address in Switzerland where it can be delivered. Tether also charges a .25% fee for redemption in any form, whereas PAXG fees are much lower. Additionally, Tether is not registered with any government regulator.
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A crypto IRA account with Bitcoin IRA allows you to open a Roth or traditional self-directed IRA. With a Roth IRA, you contribute after-tax dollars into the IRA account, but you generally don’t have to pay taxes when taking the money out of the account after you have reached retirement age.1 With a traditional IRA, you may contribute pre-tax dollars into the account but pay taxes after you retire when you withdraw the money.
Besides those differences, you will not pay capital gains taxes by purchasing Pax Gold in your IRA account. However, as with any IRA account, if you choose to withdraw before retirement age, you may face paying a penalty and any taxes you owe. This situation is the same for all types of investments held in IRA accounts.
When investing in physical gold in an IRA account, you must ensure the gold you have purchased meets the IRS requirements. The LBMA requires that gold meet a minimum of 99.5% purity to be included on the good delivery list, which is the minimum purity required by the IRS. Since Pax Gold buys gold using the London Bullion Market Association-accredited London Good Delivery list, investors do not risk the IRS declaring their investments ineligible after purchase.
Why Should I Invest PAXG with Bitcoin IRA?
Bitcoin IRA simplifies the buying and selling process with its intuitive platform and easy account creation. They also offer more than 60 different cryptocurrencies, allowing you to diversify your holdings as you add money to the account.
In addition, Bitcoin IRA provides investors with education about each coin and is constantly searching for new opportunities to add to their coin selection.
How to Create a Bitcoin IRA with PAXG
Now that you know more about Pax Gold, you may be interested in trading with the digital asset in your retirement account. Bitcoin IRA is the world’s first and most trusted crypto IRA platform that offers 24/7 trading through an online portal or custom trading app. Investors can create an account that includes Pax Gold to diversify their retirement portfolio.
1Some taxes may apply. We recommend you consult your tax, legal, and investment advisor.
Alternative IRA Services, LLC dba Bitcoin IRA is a platform that connects consumers to qualified custodians, digital wallets, and cryptocurrency exchanges. The company is not a custodian, is not a digital wallet and is not an exchange. Self-directed purchases processed through Bitcoin IRA have not been endorsed by the IRS or any government or regulatory agency. Bitcoin IRA is not an adviser. Information contained on this website is for educational purposes only. We encourage you to consult an adviser or professional to determine whether Bitcoin IRA makes sense for you. Cryptocurrencies are very speculative and involve a high degree of risk. By using the website, you understand the information being presented is provided for informational purposes only and agree to comply with our Terms of Use and Privacy Policy.
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