Gold has increasingly moved beyond its traditional role as a physical reserve asset, with blockchain technology opening new ways to hold, transfer and use the precious metal. Against this backdrop, Paxos Labs has introduced a new token aimed at combining gold ownership with returns generated through institutional gold markets.
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PAXGy Launched as a PAXG-Backed Gold Asset
Paxos Labs, an enterprise-grade digital asset infrastructure provider, announced on September 24, 2026, the launch of PAXGy, a gold-backed token designed to accrue value in gold terms. The asset is built on PAX Gold (PAXG), which Paxos describes as a federally regulated tokenized gold asset backed by investment-grade gold stored in LBMA vaults and independently attested by KPMG.
Users can obtain PAXGy by depositing PAXG or exchanging accepted stablecoins. The token uses an exchange rate denominated in gold terms, allowing its value to increase in relation to the amount of gold represented by the position.
At launch, PAXGy is available on OKX, which Paxos identifies as its only centralized exchange listing at launch. It is also available through onchain platforms including X Layer, 0x, Uniswap and Ether.Fi.
Chainlink’s CCIP is being used as the exclusive cross-chain messaging provider, allowing users to transfer PAXGy positions between supported chains without first having to unwind them.
Paxos Labs Says PAXGy Opens Gold Leasing Economics to Wider Users
According to Paxos Labs, the concept behind PAXGy is based on the established institutional gold leasing market, where gold is lent to participants such as refiners, jewelry manufacturers, miners and bullion banks in exchange for a return.
Bhau Kotecha, Co-Founder of Paxos Labs, said:
“Gold has been lent for thousands of years, and institutions have earned on their bullion reserves for decades. That market has never been accessible to ordinary holders of gold globally. PAXGy brings its economics to a token anyone can hold, with the assets in the reserve growing in ounce terms, redeemable for PAXG at any time.”
Paxos Labs said institutional gold leasing has traditionally operated through minimum transaction sizes, bilateral banking relationships and settlement systems designed for a relatively limited group of participants.
The company also highlighted the size of the gold investment market, noting that approximately $530 billion of gold is held through ETFs. According to Paxos Labs, ETF investors can pay annual fees while the underlying metal itself does not generate a return for holders.
Tokenization Expands Access to Gold Markets
The launch comes as tokenized gold products continue to expand. Paxos Labs said tokenized gold had surpassed $5 billion in value and generated $90.7 billion in trading volume during the first quarter of 2026, exceeding the combined trading volume recorded during 2025.
The company argues that tokenization makes gold more divisible, transferable and programmable. According to its explanation, aggregating smaller tokenized holdings can also create access to institutional-scale gold lending opportunities.
How PAXGy Accrues Value
Paxos Labs said the gold backing PAXGy is deployed through a network of vetted institutional borrowers operating within the established gold leasing market.
As these reserves are deployed, the exchange rate of PAXGy is designed to increase in gold terms. This means that each PAXGy could represent an increasing amount of PAXG over time, subject to the performance of the underlying strategies.
Walter Hessert, Head of Strategy at Paxos, said:
“Gold is the oldest reserve asset in the world, and holding it has always incurred a cost. As the issuer of PAXG, we made gold move at the speed and transparency of the blockchain. PAXGy makes it work like capital,”
The company said PAXGy is structured to allow holders to redeem their positions for PAXG, potentially providing more notional ounces of gold than the original principal amount when the underlying strategy generates returns.
OKX Highlights Gold’s Role Across Traditional Finance and Crypto
Jason Lau, Chief Innovation Officer at OKX, said:
“Gold is often the first asset people reach for when they want to preserve value, and one of the few that crosses between traditional finance and crypto without needing explanation. What it has never done is earn. We wanted our customers to have that on day one, through X Layer on day one & eventually the exchange, whichever way they prefer to hold it,”
PAXGy is currently available through OKX Gold Earn and X Layer, as well as onchain through Uniswap, 0x and Ether.fi. Paxos Labs said additional venues are expected to be added.
Risks Associated With PAXGy
Paxos Labs stated that PAXGy is being offered for informational purposes and that purchasing the asset involves credit, liquidity and market risks.
The company also cautioned that value accrual depends on deploying reserves into external strategies and that growth is not guaranteed. Losses from those strategies or borrower defaults could result in a downward adjustment to the exchange rate and potential losses for holders.
Because PAXG and PAXGy track gold, the fiat value of holdings remains exposed to fluctuations in the market price of physical gold.
For additional information, Paxos Labs has directed users to its official PAXGy website.
About Paxos Labs
Paxos Labs describes itself as an enterprise-grade digital asset infrastructure provider offering platforms tools to mint, move and monetize digital assets. Its Transit product provides a single integration for routing, settlement and liquidity across stablecoins.
Paxos Labs said it was incubated within Paxos and draws on more than $230 billion in tokenization activity and over a decade of regulatory expertise. The company aims to provide infrastructure for platforms developing and integrating digital assets.
FAQ’s
1. What is PAXGy and how does it relate to PAXG?
PAXGy is a gold-backed token launched by Paxos Labs and built on PAX Gold (PAXG). Users can deposit PAXG or swap accepted stablecoins to receive PAXGy, whose exchange rate is designed to accrue value in gold terms.
2. How is PAXGy designed to grow in gold terms?
According to Paxos Labs, the gold backing PAXGy is deployed through institutional gold leasing strategies. As those reserves generate returns, the PAXGy exchange rate is designed to increase relative to PAXG, meaning each token could represent more gold over time.
3. Where is PAXGy available following its launch?
PAXGy is available through OKX, which Paxos Labs identifies as its only centralized exchange listing at launch. It is also available on X Layer and through onchain platforms including Uniswap, 0x and Ether.Fi.
4. What role does Chainlink play in the PAXGy ecosystem?
Chainlink’s CCIP serves as the exclusive cross-chain messaging provider for PAXGy at launch. Paxos Labs says this allows holders to move a PAXGy position across supported chains without having to unwind the position first.
5. What are the main risks associated with PAXGy?
Paxos Labs states that PAXGy involves credit, liquidity and market risks. Returns are not guaranteed, and losses from external strategies or borrower defaults could reduce the exchange rate. In addition, the fiat value of PAXGy remains exposed to fluctuations in gold prices.
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