# How Does PAX Gold (PAXG) Compare to XAUt and Other Gold-Backed Stablecoins in 2025?

Market Dominance: PAXG vs XAUt in the Gold-Backed Stablecoin Sector with 91%+ Commodity Stablecoin Market Share

The commodity stablecoin sector has experienced remarkable growth, with gold-backed stablecoins reaching approximately $4 billion in total market capitalization by 2025, up from $1.3 billion at the year's start. Within this expanding landscape, gold-backed stablecoins command an overwhelming 91%+ share of the commodity stablecoin market, establishing themselves as the dominant category for real-world asset tokenization.

This commanding market position is heavily concentrated among two primary players: PAXG and XAUt. Together, these tokenized gold assets control approximately 90% of the gold-backed stablecoin sector, creating a clear market duopoly. XAUt leads in absolute market capitalization, exceeding $2.2 billion, while PAXG maintains a substantial presence as a close competitor, reflecting the strong institutional and retail demand for digital representations of physical gold.

The dominance of these two gold-backed stablecoins reflects several underlying factors. Both are backed by LBMA-certified physical gold stored in secure vaults, providing tangible collateral that resonates with investors seeking alternatives to traditional finance. PAXG's regulatory oversight from the U.S. New York Department of Financial Services appeals to institutional investors prioritizing compliance and audit transparency. XAUt, meanwhile, attracts traders prioritizing liquidity and seamless exchange integration across multiple blockchain networks.

This market concentration underscores the critical role gold-backed stablecoins play within the broader cryptocurrency ecosystem. By combining gold's historical store-of-value properties with blockchain's transparency and accessibility, PAXG and XAUt have positioned tokenized gold as the preferred commodity-backed asset class, substantially outpacing competing alternatives in the real-world asset tokenization space.

Performance Metrics: Comparing PAXG's $1.5 Billion Market Cap Against Competing Gold-Backed Digital Assets

With a market capitalization of $1.5 billion, PAXG maintains a significant position in the tokenized gold sector, though it ranks as the second-largest gold-backed digital asset globally. Tether Gold (XAUt) currently leads the space with a market cap exceeding $2.2 billion, representing the broader institutional adoption of gold-backed stablecoins. PAXG's circulating supply of approximately 370,506 tokens, trading at $4,382.86, reflects the token's tight supply structure tied directly to physical gold backing. The 24-hour trading volume of $518,293.64 demonstrates consistent liquidity across major exchanges, essential for institutional participants seeking exposure to physical gold through blockchain infrastructure.

When examining gold-backed digital assets, PAXG's performance metrics reveal steady adoption patterns among both retail and institutional investors. The token's market positioning indicates growing confidence in Paxos Trust Company's regulatory framework and reserve transparency. Each PAXG token represents one fine troy ounce of London Good Delivery gold stored in LBMA-accredited vaults, establishing institutional-grade backing. Compared to other competing gold-backed stablecoins, PAXG maintains competitive redemption mechanics and independent audit frameworks, supporting its valuation relative to peer assets in this emerging real-world asset category.

Regulatory Advantages: How PAXG Leverages Paxos' Institutional Trust Against XAUt and Alternative Tokenized Gold Products

Paxos' receipt of an OCC charter in December 2025 marks a watershed moment for tokenized gold products. Unlike competitors, PAXG now operates under federal regulatory oversight—the OCC explicitly confirmed that PAXG is "the only gold-backed digital asset issued under federal regulatory oversight." This distinction fundamentally separates PAXG from alternative products like XAUt, which is issued by TG Commodities Limited under an El Salvador jurisdiction, lacking equivalent US federal supervision. Paxos' conversion from its original NYDFS limited purpose trust charter to an OCC national trust charter represents institutional-grade regulatory clarity that resonates with conservative investors and institutional buyers seeking regulatory certainty.

The competitive advantage extends beyond charter status. Paxos demonstrated proactive regulatory engagement since obtaining NYDFS approval in 2015—the first company to achieve this milestone for gold-backed tokens. While Paxos faced historical scrutiny, including a $48.5 million NYDFS settlement regarding compliance practices, the SEC ultimately closed its investigation into the company without enforcement action, validating the underlying regulatory framework. This compliance track record contrasts sharply with XAUt's lighter regulatory footprint, where TG Commodities operates with substantially less stringent oversight requirements.

Institutional trust mechanisms further reinforce PAXG's regulatory advantages. Monthly attestations from independent auditors KPMG and Withum, combined with publicly accessible proof-of-reserves documentation, demonstrate transparency embedded in federal supervision. These institutional-grade controls—including on-chain compliance features like address freezing capabilities—provide sophisticated investors with auditable, regulated custodial infrastructure that alternative gold-backed products cannot replicate. For institutions prioritizing regulatory compliance and custodial transparency, PAXG's federal oversight represents measurable risk mitigation.

FAQ

What are the main differences between PAX Gold (PAXG), XAUt, and other gold-backed stablecoins?

PAXG and XAUt both peg 1:1 to physical gold but differ in fee structures and redemption terms. PAXG charges creation/destruction fees with lower minimums (0.01), while XAUt requires 50 minimum purchase and 430 for redemption. Both offer instant settlement and transparency, positioning gold stablecoins as investment tools for inflation hedging and value preservation.

Which is more suitable for investors in 2025, PAX Gold (PAXG) or XAUt, and why?

PAXG is more suitable for 2025 investors due to higher liquidity and simpler trading mechanisms. Both tokens are backed by physical gold, but PAXG offers better accessibility and faster transaction capabilities for modern crypto investors seeking gold exposure.

What are the advantages and disadvantages of gold-backed stablecoins like PAXG compared to traditional gold ETFs?

PAXG offers 24/7 blockchain trading and lower fees, enabling instant settlement. However, it lacks the regulatory oversight and physical redemption guarantees of traditional gold ETFs, presenting counterparty risks.

How does PAXG's custodial mechanism and security measures ensure gold authenticity and liquidity?

PAXG is regulated by New York's Department of Financial Services. Monthly third-party audits verify gold reserves match token supply, ensuring authenticity. Each token represents one fine troy ounce of physical gold stored in audited vaults, guaranteeing liquidity and real backing.

2025年黄金支持稳定币的市场前景如何，主要风险有哪些？

Gold-backed stablecoins like XAUT and PAXG show steady niche growth with 16 billion dollar combined market value by mid-2025. Main risks include low trading liquidity, high redemption minimums, regulatory uncertainty, and custodial counterparty risks. Despite growth potential, adoption remains minimal compared to USD stablecoins.

How to buy and use PAX Gold (PAXG), and what are the transaction costs and fees?

Purchase PAXG through major crypto platforms by registering and verifying your account, then adding a payment method. Fees typically range from 1-3% depending on the platform and payment type. Use PAXG by holding as a gold-backed asset, transferring between wallets, or trading on supported markets.

FAQ

What is PAXG coin? What does it represent?

PAXG is a blockchain-based digital token issued by Paxos Trust Company, where each token represents ownership of one ounce of physical gold stored in secure vaults. It combines gold's stability with cryptocurrency's flexibility and liquidity.

What is the difference between PAXG and physical gold?

PAXG is a blockchain-based digital token backed 1:1 by physical gold stored in secure vaults. Unlike physical gold, PAXG can be freely traded on-chain 24/7, redeemed for actual gold bars, and requires no storage, shipping, or insurance costs.

Who issues PAXG coin? What is the company behind it?

PAXG coin is issued by Paxos Trust Company, a regulated financial institution. Paxos provides blockchain-based custody and settlement solutions for digital assets.

How to buy and hold PAXG coin?

Purchase PAXG through major crypto platforms using multiple payment methods like credit cards or bank transfers. Complete identity verification first. After purchase, store PAXG in your exchange wallet for easy trading or transfer to a personal wallet for long-term holding and security control.

PAXG coin在哪些交易所可以交易？

PAXG can be traded on major cryptocurrency exchanges including Kraken. The token is supported on select platforms that offer precious metals trading. Each exchange provides different trading pairs, fees, and liquidity options for buying and selling PAXG.

How is PAXG's value guaranteed? Is it backed by physical gold?

PAXG's value is fully backed by physical gold. Each token represents one ounce of London Good Delivery gold stored in professional vaults, managed by Paxos Trust Company. Monthly third-party audits ensure token supply matches gold reserves, guaranteeing complete transparency and redemption capability.

Is PAXG coin safe? What risks exist?

PAXG is secure with comprehensive audits and robust smart contracts. Primary risks include potential smart contract vulnerabilities, oracle failures, and centralized custody concerns. Monitor network developments carefully.

What are the differences between PAXG and other gold-related products like XAUT and GLD?

PAXG is tokenized gold issued by PAX Global, backed by physical gold stored in vaults. XAUT is issued by Tether and also represents physical gold. GLD is a traditional gold ETF. PAXG offers blockchain transparency, 24/7 trading, and lower redemption minimums compared to traditional gold products.

Do I need to pay fees to hold PAXG coin?

No, holding PAXG does not require vault storage or custody fees. You only pay a 0.02% transaction fee per trade and minimal gas fees in ETH.

Can PAXG coin be redeemed for physical gold?

Yes, PAXG coin can be redeemed for physical gold bars. If you hold more than 430 PAXG tokens, you can exchange them for actual gold bars. Alternatively, you can redeem your tokens for their equivalent USD value through Paxos.