Paxos Labs expands investment options for gold-backed crypto

• Key insight: Paxos Labs has released a new digital asset for tokenized gold investing. 
• What's at stake: Amid geopolitical and economic pressure, investors are looking for new hedges. 
• Expert quote: "With everything that's going on in the world, there's going to be a demand for gold and tokenized gold." —Paxos Labs' Bhau Kotecha
  

 As the uses of tokenization proliferate, gold is emerging as a potential target for payment firms, given the metal's popularity as a hedge against risks from tariffs, the Iran war and other economic challenges. 

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"With everything that's going on in the world, there's going to be a demand for gold and tokenized gold," Bhau Kotecha, co-founder of Paxos Labs, told American Banker.

Paxos Labs has launched PaxGy, a gold-backed token that is designed to accrue value in ounces of gold by deploying its underlying reserves in the institutional gold leasing market.

Paxos Labs, a 2025 spinoff from blockchain fintech Paxos  is among financial institutions such as HSBC that are using cryptocurrency-related tools to improve access to gold as the precious metal attracts more investors.

"Blockchain is designed to tokenize assets. Stablecoins are the first and most obvious, but other assets like stocks, bonds and in this case, gold are also ripe for tokenization," Tony DeSanctis, a vice president at Cornerstone Advisors, told American Banker.