Binance Founder CZ Says Tokenized Gold Isn’t Truly ‘On-Chain’ — And It’s Stirring Debate
A heated debate has emerged within the crypto neighborhood after Binance founder Changpeng “CZ” Zhao claimed that tokenized gold, regardless of its rising recognition, isn’t really “on-chain.”
His remarks got here in response to gold advocate and longtime Bitcoin critic Peter Schiff, who just lately introduced plans to launch a blockchain-based tokenized gold platform.
Gold’s rally in conventional markets has additional fueled the dialog; the steel’s latest renewed market exercise has drawn renewed consideration to its tokenized variations within the crypto house.
The Gold Debate Goes On-Chain: CZ and Peter Schiff Clash Over Blockchain’s “Real Value”
In a latest interview clip, Schiff described a system the place customers might purchase gold by way of an app, retailer it in vaults, and switch possession digitally or redeem it for bodily gold. “Ideally, the one factor that is smart to placed on a blockchain is gold,” Schiff stated within the video.
“You can use tokenized gold as a medium of trade, as a unit of account, and as a retailer of worth.”
He added that the upcoming platform, constructed underneath his firm Shift Gold, will permit on the spot transfers and redemption, selling what he described as a “steady” digital asset tied to bodily worth.
However, CZ rapidly weighed in on X (previously Twitter), suggesting that tokenized gold solely simulates blockchain integration. “Tokenizing gold is NOT ‘on-chain’ gold,” he wrote.
— CZ
BNB (@cz_binance) October 23, 2025
“It’s tokenizing that you simply belief some third celebration will provide you with gold at some later date — perhaps a long time later, throughout a struggle, after administration modifications, and many others. It’s a ‘belief me bro’ token.”
He added that such trust-based mechanisms clarify why “no gold cash have actually taken off” within the digital asset house.
The trade between the 2 figures comes as tokenized gold markets hit new highs. On October 7, the mixed market capitalization of gold-backed digital property crossed the $3 billion mark, according to CoinGecko. Now, it’s at the moment at over $3.75 billion.
Tokens equivalent to Tether Gold (XAUT), PAX Gold (PAXG), and Kinesis Gold (KAU) led the market, every intently monitoring spot gold costs, which briefly surged previous $4,000 per ounce, an all-time high.
Trading quantity for the asset class jumped to $640 million inside 24 hours as traders sought refuge amid the continued U.S. government shutdown and world financial uncertainty.
Data from rwa.xyz shows continued development in real-world asset (RWA) tokenization, with whole on-chain RWA worth surpassing $34 billion.
Tokenized commodities, led by gold, now account for greater than $3.5 billion of that whole, a 36% enhance within the final month. Tether Gold and PAX Gold stay dominant, with market capitalizations of roughly $2.1 billion and $1.3 billion, respectively.
Despite the rising curiosity, CZ’s remark highlights a deeper query about whether or not these property can really be thought-about “on-chain.”
Are Tokenized Gold Really Not Fully Decentralized?
While tokenized gold permits holders to personal digital representations of bodily gold, sometimes pegged to weights like a troy ounce or a gram, the underlying asset stays saved off-chain in centralized vaults.
Issuers equivalent to Paxos and Tether use sensible contracts to mint tokens similar to gold reserves, providing audits and redemption choices. But as CZ identified, the system nonetheless relies on third-party custodians to confirm and safeguard these reserves.
In essence, whereas possession of the tokens is recorded on the blockchain, the gold itself stays off-chain.
Each transaction depends on belief that the issuer certainly holds and manages the corresponding bodily gold, a construction some critics argue undermines the core ideas of decentralization.
For tokenized gold to be fully on-chain, each the illustration and the settlement of possession would wish to happen with out middleman custodians, a technical and logistical problem on condition that gold, as a bodily commodity, can’t exist natively on a blockchain.
Currently, even probably the most clear issuers nonetheless function inside conventional monetary frameworks involving regulated vaults and audit establishments.
Over 150,000 Holders Now Own Tokenized Gold as Sector Activity Hits Record Levels
The broader tokenized gold sector, nonetheless, continues to develop quickly. Market information shows rising adoption, with greater than 150,000 holders and over 20,000 energetic addresses interacting with gold-backed tokens up to now month.
Source: RWA.xyz
The month-to-month switch quantity for tokenized gold has surged above $8.6 billion, signaling growing retail and institutional participation.
Recent developments counsel that main gamers are doubling down on the narrative. Earlier this month, Tether and crypto lender Antalpha, a agency related to Bitcoin mining big Bitmain, raised at least $200 million for a new digital asset treasury vehicle centered on XAUT.
The initiative would construct a public treasury solely holding tokenized gold, doubtlessly strengthening its liquidity and visibility within the RWA market.
Gold’s rally in conventional markets has additional fueled the dialog. The metal recently surged to $4,035 per ounce amid fears of extended U.S. authorities gridlock and weakening fiscal confidence.
Although costs briefly corrected after a pointy $2 trillion drop in market cap, gold stays up roughly 30% since April.
Analysts attribute the rally to Trump’s commerce insurance policies, a weaker greenback, and investor demand for security, situations which have additionally helped tokenized gold achieve traction as a digital bridge to conventional property.
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