Four thousand years of gold earning
Lending metal is about as old as working it. Cuneiform tablets from the Old Babylonian period record silver loans made at interest, and the Code of Hammurabi set a ceiling on what a lender could charge for one. Goldsmiths have always handled metal they did not own, and they still do. A large amount of the gold moving through the jewelry trade today is leased rather than bought.
The borrowers are ordinary businesses with an ordinary cash-flow problem. A refiner needs metal on hand months before the finished bar sells. A jewelry manufacturer carries inventory through a season and gets paid at the end of it. Miners hedge production still in the ground, and banks keep bullion available to settle. Borrowing the metal costs less than buying it outright, so they borrow, and they pay for the difference.
Central banks do the same thing at a different scale. They hold close to a fifth of all the gold ever mined, and in the World Gold Council's 2026 survey 37 percent of them said they actively manage those reserves, which for a central bank means lending and swaps. They have been moving metal between each other for as long as they have had reserves to move. In 1974 the Bundesbank officially lent Italy two billion dollars against 543 tonnes of Italian bullion sitting in a vault in New York.
The October 1987 crash then cut mining companies off from equity capital, and borrowing gold turned out to be how you finance a mine when nobody will buy your shares. The London Bullion Market Association was incorporated that December, and the modern lending market took shape around it. By 1999 roughly 2,100 tonnes were out on lease, enough that the largest official holders agreed to stop expanding it. Borrowing costs went vertical on the expectation that less metal would be available to borrow, and the gold price rose almost 14 percent in three trading days.
For the twenty-six years that followed you could simply look up what borrowing gold cost. London published the number every morning from 1989 until the benchmark was discontinued in January 2015. The market has not publicly published its own price since. What stands in its place is reconstruction: private firms infer the rate from futures and spot data and publish an estimate of it.
Physical metal in London has been tight since 2025, with silver reaching 6.3 percent on one-month deals this February and far higher during last October's squeeze. Borrowing precious metal is about as expensive as it has been in a generation.
What has always been true of it is that it runs on institutional rails: minimum sizes, bilateral relationships with bullion banks, credit assessment, settlement. A market can be entirely public, quoted daily, and still be sized for a few hundred participants.
Meanwhile, roughly $530 billion of gold sits in ETFs, where the largest fund charges 40 basis points a year to store it. The metal in those vaults has been earning a return for someone the entire time, and it was never going to be the person who bought the asset.
PAXGy connects the gold you own to the market that pays for it.
What tokenization changed
When an ounce becomes a token, it becomes divisible, transferable and programmable. A claim on a hundredth of an ounce settles as cleanly as a claim on a thousand ounces, and that single property is what shrinks the minimum viable participant in a gold market from an institution to a person.
Tokenized gold went from nothing in 2017 to more than $5 billion in value, and in the first quarter of this year it traded $90.7 billion, more in three months than in all of 2025.
How PAXGy works
Holders can deposit PAXG and swap accepted stablecoins to receive PAXGy on supported platforms or onchain. The reserves underlying PAXGy are deployed to a network of vetted institutional borrowers through the same leasing market that has set bullion rates for decades. When the reserves underlying PAXGy are deployed, value accrues to the PAXGy exchange rate over time, so your PAXGy token balance stays exactly where it is while each PAXGy comes to be worth more PAXG.
How to access it
PAXGy is powered by our cohort of launch partners OKX, X Layer, Uniswap, 0x, Ether.Fi and Chainlink, with more venues to follow.
Because it behaves like any other ERC-20 token, from launch PAXGy is composable directly with onchain platforms through X Layer, Uniswap, 0x Ether.Fi. So holders can use a PAXGy position across those platforms without unwinding it first.
Built on PAXG
PAXGy is built on top of PAXG, the gold asset issued by Paxos, the institutionally recognized infrastructure behind more than $180 billion in tokenized assets. Every PAXG token is backed one-to-one by physical gold held in institutional custody and attested monthly by KPMG, and it is supported across exchanges, institutional custodians and regulated financial intermediaries.
What this enables
There are trillions of dollars of gold sitting in vaults, funds, and wallets, and a functioning institutional market that pays to borrow it. PAXGy is the connection between the two.
Making that connection needs the market that already pays for gold to be open to the people who already own it.
That opened today.
Learn more and access PAXGY at PAXGy.com
This information is for informational purposes only and is not an offer to sell, or a solicitation of an offer to buy any asset. A purchase of PAXGy involves credit, liquidity, and market risks. The asset accrues value by deploying its reserves into external strategies, but growth is not guaranteed; if these strategies suffer losses or borrower defaults, the exchange rate may be adjusted downward, potentially resulting in losses. Because PAXG and PAXGy are gold-tracking instruments, the fiat value of PAXGy holdings is exposed to the market volatility of physical gold.. This document is not directed at any person in any jurisdiction where its publication or availability is prohibited or would be unlawful.