PAX Gold Rises as Preferred Option Amid Gold-Backed Stablecoin Competition

PAX Gold has emerged as a preferred option for U.S. investors seeking exposure to tokenized gold, owing to its availability on major exchanges and regulatory compliance. Tokenized gold, backed by physical assets, has seen a surge in demand as a hedge against macroeconomic instability and crypto volatility.

PAX Gold and Tether Gold operate on similar principles, each backed by one troy ounce of gold. However, PAX Gold is issued by Paxos Trust Company, a New York State Department of Financial Services (NYDFS) regulated entity, and is available on U.S. exchanges such as Coinbase, Gemini, and Kraken. By contrast, Tether Gold is issued by Tether Limited, a firm with a history of regulatory scrutiny, including a $41 million fine from the CFTC in 2021. These differences make PAX Gold more accessible and, in the eyes of many investors, a safer bet.

The gold-backed stablecoin market has grown rapidly, with tokenized gold reaching a market value of over $4.2 billion by late 2025. PAX Gold and Tether Gold together hold approximately 89% of the market share, reflecting their dominance in the space. As macroeconomic uncertainty continues—driven by shifting central bank policies and rising recession indicators—investors are increasingly turning to digital gold as a stable asset class.

What sets PAX Gold apart from its main competitor? PAX Gold benefits from monthly reserve reports and U.S. regulatory compliance, offering investors greater transparency and assurance. Tether Gold, while slightly cheaper in terms of redemption fees, is less accessible in the U.S. and lacks the same level of regulatory oversight.

How has the broader market environment affected gold-backed stablecoins? As global liquidity contracts and central banks shift away from synchronized monetary policy, investors are adopting more risk-aware strategies. Gold-backed stablecoins, with their dual hedge of intrinsic value and blockchain efficiency, are positioned to benefit from these macroeconomic shifts. The projected growth of the tokenized gold market—expected to reach $2 trillion by 2028—further underscores its appeal as a hybrid asset class.

What should investors consider when evaluating PAX Gold? Investors should be mindful of the on-chain structure and trading premiums inherent to stablecoins. While PAX Gold offers 24/7 liquidity and fractional ownership, it also faces structural costs that may impact returns. Moreover, the broader crypto market remains volatile, and tokenized gold should be viewed as a complementary rather than a primary asset.

As the market evolves and regulatory clarity improves, PAX Gold is likely to maintain its leading position among gold-backed stablecoins. Its U.S. licensing and accessibility make it a practical choice for investors seeking exposure to gold without the complexities of physical ownership.