TLDR
- Changpeng Zhao criticized Peter Schiff’s plan to launch a tokenized gold product, stating that it cannot be considered a digital equivalent of gold.
- Zhao emphasized that tokenized gold relies on centralized entities to hold and redeem the physical gold, making it a digital promise rather than actual ownership.
- He pointed out that tokenized gold contradicts the core principle of blockchain technology, which aims to eliminate the need for third-party custodians.
- Peter Schiff plans to offer tokenized gold through his platform SchiffGold, allowing users to buy and transfer gold at lower costs than Bitcoin.
- Zhao predicted that Bitcoin’s market cap will eventually surpass gold’s, although he acknowledged the significant gap between the two assets.
Changpeng Zhao, former CEO of Binance, criticized Peter Schiff’s plan to launch a tokenized gold product. Zhao argued that tokenized gold cannot be considered digital gold. He emphasized that tokenized gold is not the same as on-chain gold, stating that the two should not be confused. Zhao’s comments follow Schiff’s recent proposal for tokenized gold as a rival to Bitcoin.
Changpeng Zhao Slams Trust-Based Tokenized Gold
Changpeng Zhao made it clear that tokenized gold is essentially an IOU. Although tokenized gold exists on the blockchain, it still relies on centralized entities. These third parties are responsible for holding and redeeming the physical gold backing the tokens. Zhao pointed out that this system does not give holders full ownership of physical gold. Instead, it represents a digital promise backed by a company’s assurances.
Saying the obvious. Most people “in crypto” know this, most people “not in crypto” may not understand yet.
Tokenizing gold is NOT “on chain” gold.
It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe… https://t.co/KMYfz2dG04
— CZ 🔶 BNB (@cz_binance) October 23, 2025
Zhao explained that tokenized gold is based on trust in third-party custodians. He said, “It’s tokenizing that you trust some third party will give you gold at some later date.” He also noted the problems that could arise in the future, including management changes and crises. Zhao’s critique highlights a central flaw in the system: its reliance on centralized entities that can compromise the promise of gold delivery.
The concept of tokenized gold contradicts one of crypto’s core principles: decentralization. In Zhao’s view, crypto aims to eliminate the need for intermediaries. He argued that by depending on centralized third parties, tokenized gold defeats the very purpose of blockchain technology.
Schiff’s Vision for Tokenized Gold
Peter Schiff, a well-known advocate for gold and a critic of Bitcoin, recently revealed his plans for a tokenized gold product. Schiff claimed that gold would offer a better alternative for blockchain use than Bitcoin. He argued that gold would maintain its purchasing power over time and fulfill many of Bitcoin’s promises. According to Schiff, tokenized gold would be faster and cheaper to transfer than Bitcoin.
Schiff’s tokenized gold product will be offered through his platform, SchiffGold. The platform will enable users to purchase gold and store it in a secure vault. Users will be able to transfer ownership or redeem their tokens for physical gold. Schiff believes this system would rival Bitcoin as a means of payment and store of value.
Despite Schiff’s optimism, Zhao remains skeptical. Zhao’s concerns center on the idea that tokenized gold still requires trust in an external party. He believes this structure is not aligned with the principles of cryptocurrencies, which strive for decentralization and independence from centralized control.
Bitcoin vs. Gold Market Capitalization
In recent statements, Changpeng Zhao discussed Bitcoin’s potential to surpass gold’s market capitalization. He acknowledged the significant gap, with gold’s market cap at $28.5 trillion and Bitcoin’s at $2.18 trillion. Zhao confidently predicted that Bitcoin would eventually surpass gold in market cap, although it may take time. Bitcoin’s finite supply, currently at 19.93 million BTC, plays a key role in this growth trajectory.
Zhao’s prediction for Bitcoin is based on its rapid growth since its inception. Bitcoin crossed the $1 trillion mark within just six years of its 2009 launch. Given its current market momentum, Zhao believes Bitcoin’s valuation will continue to increase. However, he also recognized the challenges in closing the gap with gold’s market dominance.
