Just-In: Changpeng “CZ” Zhao Counters Peter Schiff, Says “Tokenizing Gold Is Not On-Chain Gold”

Binance founder Changpeng “CZ” Zhao debunked economist Peter Schiff’s views on tokenizing gold. CZ claimed that tokenizing gold is not ‘on-chain’ gold, most people in the crypto industry understand it.

Changpeng “CZ” Zhao Debunks Peter Schiff’s Tokenized Gold

In the latest interview, gold bug Peter Schiff revealed plans to launch a tokenized gold product. He claimed that a blockchain-based platform will allow people to use gold as a medium of exchange.

“You can pay or be paid in gold. I’m also going to give people a debit card where gold will be sold to cover transactions,” he added. Recently, Peter Schiff claimed gold works better as money now than ever before.

Commenting on the tokenized gold product plans of Peter Schiff, Changpeng “CZ” Zhao said, “Tokenizing gold is NOT on chain gold.” It just means trusting a third party to redeem the gold in the future, making it a ‘trust-me-bro’ token.”

He added that most people in the crypto community know about bringing real-world assets on-chain, but people not in crypto will not understand yet. Tokenized gold may track real-world value, but without native on-chain settlement. This makes it fundamentally different from true decentralized assets.

Low Demand for Gold Crypto Coins

Changpeng Zhao claimed that “gold coins” have never really succeeded because a third party will give “you gold at some later date, even after their management changes, maybe decades later, during a war, etc.”

Gold-backed tokens have recorded low demand from investors. PAX Gold (PAXG) and Tether Gold (XAUt) are the only gold-backed crypto that have successfully surpassed $1 billion market cap. This happened amid a massive rise in gold prices due to “debasement trade” after investors’ demand for safe havens rose amid uncertainty and volatility.

As CoinGape reported earlier, Tether and Antalpha plan to raise $200 million to establish a tokenized gold treasury. The digital-asset treasury would stockpile Tether’s gold-backed token XAUt.

At the time of writing, PAXG and XAUt have dropped more than 3% to $4,112 and $4,108 in a week, respectively. This comes following a 6% drop in gold prices.