What happened?
A public debate erupted after Binance founder Changpeng “CZ” Zhao said tokenized gold isn’t truly “on-chain.” He was responding to Peter Schiff’s announcement that he’s launching a blockchain-based tokenized gold platform where users can buy, transfer, and redeem physical gold. The argument comes as tokenized-gold markets have surged — roughly $3.75 billion in market cap with big spikes in trading volume amid a rally in physical gold.
Who does this affect?
Crypto investors and more than 150,000 tokenized-gold holders and active addresses are directly affected because questions about custody and trust could change how they view these tokens. Issuers and custodians like Tether, Paxos, and the vault operators that back these tokens face increased scrutiny since the model relies on third-party reserves and audits. Institutional players building RWA products, exchanges, and regulators also have a stake in how these assets are defined and treated.
Why does this matter?
If investors start seeing tokenized gold as a “trust me” instrument rather than a true on-chain asset, demand and liquidity for these tokens — and related RWA products — could dry up, weighing on prices and trading volumes. On the other hand, continued adoption and big initiatives (like a proposed $200M XAUT treasury) could deepen liquidity and pull more institutional safe-haven capital into crypto markets. How this debate is resolved will influence regulatory attention and capital flows between physical gold, gold tokens, and other crypto assets, so it could shift broader market dynamics.