Binance founder Changpeng Zhao (CZ) has called out gold advocate and long-time Bitcoin critic Peter Schiff over his plan to launch a tokenized gold product, arguing that such offerings are not truly “on-chain” assets and fail to embody the trustless nature of cryptocurrencies.
CZ: Tokenized Gold Isn’t Real On-Chain Gold
In a post on X (formerly Twitter) on October 23, Zhao reminded the crypto community that tokenized gold while technically existing on a blockchain is still a digital IOU backed by third-party custodians.
“Tokenized gold is not on-chain gold,” Zhao wrote. “It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe decades later, during a war, etc. It’s a ‘trust-me-bro’ token.”
CZ’s comments emphasize that unlike Bitcoin, which operates without centralized control, tokenized commodities such as gold require trust in intermediaries who hold and redeem the physical metal. This dependency, he argued, undermines one of crypto’s founding principles eliminating the need for trust in centralized entities.
According to Zhao, this reliance on custodians is precisely why gold-backed cryptocurrencies have not gained significant traction in the digital asset space.
Peter Schiff’s Tokenized Gold Project
Zhao’s remarks came in response to Peter Schiff’s recent announcement that he plans to launch a tokenized gold payment system through his company SchiffGold.
Speaking in an interview with Crypto Tengen, Schiff said his upcoming product will allow users to buy, hold, and transfer tokenized gold that’s fully backed by real bullion stored in a secure vault. Users would also be able to redeem the tokens for physical gold or use them for payments.
“Because gold will maintain its purchasing power, the one thing that makes sense to put on a blockchain is gold,” Schiff said. “It will do all the things Bitcoin promises but can never do.”
Schiff also claimed that gold transfers on his platform would be faster and cheaper than Bitcoin transactions, offering “instant ownership transfers at very low cost.”
Gold’s Market Crash vs. Bitcoin’s Rally
The debate over tokenized gold comes amid a sharp correction in the gold market. The precious metal recently plunged from $4,381 to $4,115 one of its steepest drops in years before recovering slightly to around $4,150. The decline wiped over $2 trillion from gold’s market capitalization, bringing it down to roughly $28.5 trillion.
Bitcoin, on the other hand, has been on a mild recovery streak. The world’s largest cryptocurrency rose 0.95% in the past 24 hours, bouncing back above $110,000 before settling near $109,287.
CZ Predicts Bitcoin Will Surpass Gold’s Market Cap
Earlier this week, Zhao expressed confidence that Bitcoin’s market capitalization will one day surpass gold’s though he acknowledged it may take years for that prediction to come true.
According to Companies by Market Cap, gold remains the world’s most valuable asset with a $28.5 trillion valuation, while Bitcoin ranks eighth globally at around $2.18 trillion.
Given Bitcoin’s finite supply of 19.93 million coins, it would need to reach roughly $1.5 million per BTC to overtake gold’s total market value. Yet, Zhao believes this milestone is only a matter of time, noting Bitcoin’s unprecedented growth achieving a $1 trillion market cap in just six years after its 2009 launch.
Final Thoughts
CZ’s remarks reignite the long-standing debate between trust-based assets like gold and trustless digital assets like Bitcoin. While Schiff argues that gold’s intrinsic value makes it the ideal blockchain asset, Zhao maintains that true decentralization cannot exist when users must rely on custodians to honor redemption promises.
In the eyes of the crypto community, Zhao’s stance reinforces the belief that Bitcoin not gold remains the ultimate form of digital money.
