Nexo Purchases $5 Million in PAX Gold to Meet Demand for Tokenized Gold Lending and Borrowing

5 min read

Nexo, the leader in crypto banking, has purchased $5 million worth of PAX Gold (PAXG), to meet rising demand from its customers.

Since Nexo announced its Instant Crypto Credit Lines™ would support the digital gold token PAXG, the company has received numerous inquiries from OTC clients about exchanging parts of their existing collateral (BTC, ETH, XRP, etc.) into PAXG, demonstrating the growing value and interest in tokenized gold. With the new and plentiful $5 million investment in PAXG Nexo is now more than equipped to cater to the needs of its OTC customers, thus once again taking its business to the next level.

Powered by Paxos, the regulated gateway between digital and traditional assets, PAXG is a digital token on the Ethereum blockchain. Each token represents one ounce of premium, institutional-grade gold: Good Delivery gold held in London-based Brink’s vaults. Nexo’s purchase accelerated the growth of PAXG’s market cap to over $11M, over twice the size of the next biggest digital gold token.

Paxos is also announcing that BitGo now provides support for PAXG across its institutional-grade hot and cold wallet solutions. BitGo pioneered multi-signature security in 2013, and, since then, multi-signature has been recognized as an established open-source protocol that has been thoroughly tested and evaluated by the security community. All digital assets supported by BitGo are integrated using the company’s single API so no additional coding is required for clients to add PAXG.

Antoni Trenchev, managing partner at Nexo, addressed the Nexo community’s interest in PAXG as follows:

“The gold bug and crypto enthusiasts mentalities have always been similar. It comes as no surprise that some of our 500k+ users are quite fascinated by the concept of tokenized physical gold, so we are glad to address their needs together with Paxos. And with BitGo’s custodial services now available for PAXG, institutions like Nexo have a military-grade secure solution to store their digitized gold holdings.”

Paxos strategy lead Walter Hessert also commented on the recent development:

“We are excited about BitGo’s support and to see that the Nexo community is so interested in PAX Gold. It’s a very strong signal that people see PAX Gold the same way we do: as an asset with staying power and value far beyond any other.”

Gold to Shine Again

The flexibility of trading and investing gold via the blockchain is quickly bringing back the asset’s popularity. Recently many prominent names in finance have turned their attention to gold, including Ray Dalio, owner of the world’s largest hedge fund, Bridgewater, who has repeatedly argued for the value of gold in the current financial environment wherein central banks are becoming more aggressive with policies that devalue fiat currencies, provoking a “paradigm shift” in investment. Recently, Dalio commented on CNBC:

“I believe that it would be both risk-reducing and return-enhancing to consider adding gold to one’s portfolio.”

With seasoned investors like Dalio publicly announcing their support for gold, it is only fitting that Nexo’s clients add significant portions of PAXG to the company’s asset reserve. Investments like this are vital since digitized gold is only the very beginning of the upcoming tokenization of the world as assets from all areas of business are coming onto the blockchain.

All Assets On-Chain

With only 30% of global wealth held in money, it is no surprise seeing the tokenization of assets across more and more domains. Stocks, bonds, real estate and even fine art are all being digitalized and brought on the blockchain as investors are beginning to see the benefits of tokenized assets, namely: large-scale fractional ownership, an opportunity for inclusive redistribution of wealth and, of course, unlocking the value of assets across all domains.

To illustrate these benefits of tokenization a little better, imagine investors could hold tokens for the Mona Lisa, each token representing a shred of Da Vinci’s masterpiece. Thus, the ownership is split among multiple entities, allowing them to use the value of the physical asset (their relative shred of the Mona Lisa) on the blockchain to make further investments through platforms like Nexo. This, in turn, gives just about anyone access to Western-style wealth creation, regardless of their location or social background.

The same benefits described above are already available right now for gold, which in and of itself is a $7 trillion industry. With Nexo’s new investment in PAXG, the company is showing its confidence in the tokenization of the world, and its determination to reveal the profitable glimmer of digitized gold.

About Nexo

Nexo is the leading regulated digital assets institution. The company’s mission from day 1 is to maximize the value of digital assets by offering tax-efficient ‘Instant Crypto Credit Lines’, high-yield ‘Earn Interest’ products and ‘Send & Pay’ capabilities for our clients, while enjoying the $100 million custodial insurance and military-grade security of the Nexo platform. Since raising $52.5 million in 2018, Nexo has processed $1+ billion in 40+ fiat currencies for 500,000+ users across 200 jurisdictions.

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About Paxos

Paxos is a regulated financial institution on a mission to create a global, frictionless economy. By building infrastructure to enable the movement between physical and digital assets, Paxos is creating a future where all assets — from money to commodities to securities — are digitized and can move instantaneously 24/7.

Today, as the first regulated Trust company for digital assets, Paxos technology makes it possible to tokenize, custody, trade and settle assets. With offices in New York, London and Singapore, Paxos takes a global view of modernizing the financial system.

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About BitGo

BitGo is the leader in institutional digital asset financial services, providing clients with security, custody, and liquidity solutions. BitGo is the world’s largest processor of on-chain bitcoin transactions, processing over 20% of all global Bitcoin transactions, and $15 billion per month across all cryptocurrencies. BitGo’s customer base includes the world’s largest cryptocurrency exchanges and spans more than 50 countries. In 2018, it launched BitGo Trust Company, the first qualified custodian purpose-built for storing digital assets. BitGo is backed by Craft Ventures, Digital Currency Group, DRW, Galaxy Digital Ventures, Goldman Sachs, Redpoint Ventures, and Valor Equity Partners.

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