Gold is the world’s oldest and most established store of value. It’s the original stable currency, long before stable coins became a thing.
For many investors though, the disadvantage of gold is that you can’t earn interest on it and that it’s hard to loan out. The only official institution that offers interest on gold is the State Bank of India’s Gold Deposit Scheme, where the interest rates are as paltry as cash deposit rates.
With the rise of gold-backed cryptocurrencies, it’s now possible to earn interest on gold deposits. Holders of PAX Gold (PAXG) can earn interest by depositing at Binance.
What is PAXG?
PAX Gold (PAXG) is the world’s largest gold-backed cryptocurrency by market cap. One PAXG token is backed by one fine troy ounce (t oz) of a 400 oz London Good Delivery gold bar, stored in Brink’s vaults. Holders of PAXG own the underlying physical gold, held in custody by Paxos Trust Company.
PAXG is built as an ERC-20 token on the Ethereum blockchain, so it can be moved or traded anywhere in the world, wherever ERC-20 tokens are supported.
How to earn interest on gold
To get started you will need to buy PAXG. The easiest way to buy PAXG is at Binance (the world’s largest crypto exchange).
Once you are set up on Binance you can either transfer cryptocurrency (such as Bitcoin) to your account or deposit fiat currency directly into your account. Binance offers direct transfers from your bank account, avoiding fees associated with credit cards.
With your cryptocurrency balance, you can then trade it for PAXG, which can then be staked at Binance.
This type of investment is not for everyone, especially as it goes against the grain of why some people invest in gold and cryptocurrency in the first place.
For many gold investors, the whole point of gold is to be a secured store of value that can’t be seized or taxed.
And the same goes for crypto holders as well. Once your cryptocurrency leaves your hard wallet and onto an exchange, it’s exposed to the risk of being lost.
There is a real risk of losing your deposit, as has been shown with the experience with crypto lender Celsius freezing all account withdrawals (including PAXG).
This post is written for information purposes only and is not financial advice. Quoted interest rates and sign-up bonuses were correct at the time of publishing. Goldscape is an affiliate of Binance.