Binance Founder Zhao Criticizes Peter Schiff’s Gold Tokenization Plan

Binance founder and former CEO Changpeng Zhao (CZ) has voiced strong doubts about gold investor Peter Schiff’s recently announced gold tokenization project, citing significant “fundamental trust issues” that cast a shadow over the initiative.

CZ Challenges the Viability of Schiff’s Gold-Backed Tokens

Peter Schiff, a renowned Bitcoin (BTC) critic and firm advocate of traditional investments like gold, recently made headlines by reversing his anti-blockchain stance with the launch of a blockchain-based gold tokenization product. The initiative, Schiff claims, is designed to make gold investments more accessible, practical, and liquid for a wider audience.

However, CZ has openly questioned the core mechanics and reliability of Schiff’s venture. Highlighting its centralized nature, CZ remarked, “While it may seem forward-thinking at first glance, this is fundamentally a centralized claim that relies on a custodian.”

He compared gold-backed tokens to holding nothing more than "promissory notes" rather than direct, on-chain ownership of gold. CZ elaborated, “When you buy tokenized gold, you’re not actually holding gold on the blockchain. Instead, you’re holding a certificate that represents gold supposedly stored in a vault. If the issuer goes bankrupt, gets hacked, or faces internal management issues, those certificates could instantly lose all value.”

He further warned of the fragility inherent in such arrangements, stating, “The physical gold may still exist, but the promises tied to it may no longer hold weight. Can any third-party entity truly guarantee these promises in a time of global instability—be it war, financial crises, or systemic meltdowns?”

According to CZ, this lack of resilience underscores the questionable viability of Schiff’s project. He dubbed the gold tokenization plan a “trust-me” type of arrangement, which he sees as fundamentally opposed to blockchain’s core principle of decentralization. “True blockchain innovation does not rely on third-party promises. It’s built on trustless systems—this is the backbone of blockchain.”

So far, CZ argued, no gold tokenization effort has managed to dominate the market, adding, “Schiff is selling convenience, not innovation, and convenience alone cannot redefine the blockchain space.”

Gold’s Price Crash Exacerbates Challenges for Schiff

Peter Schiff’s ambitious project comes at a time when gold is confronting severe market pressures. On October 22, gold prices nosedived below $4,100 per ounce, registering the steepest single-day decline in 12 years.

This downturn has fueled criticism from the cryptocurrency community and financial analysts alike. Prominent trader Peter Brandt aimed jabs at long-term gold investors, mocking their tolerance for decades of modest returns and protracted corrections. “Gold’s annualized return over the past 45 years is merely 3.6%,” Brandt pointed out.

The situation is further complicated by Schiff’s own bold predictions about gold’s potential performance. Not long ago, Schiff confidently forecasted that gold would outpace both Bitcoin and the S&P 500, projecting a rise to $6,000 per ounce by Christmas. Yet, actual market behavior has contradicted his claims, with gold prices instead tumbling and leaving his predictions far from realized.

Meanwhile, Bitcoin appears to be rebounding, showing signs of resilience in spite of broader market struggles. As of the last 24 hours, BTC prices have climbed by 1.17%, reaching $10,9629 (approximately 15 million KRW). This steady recovery contrasts sharply with gold’s recent struggles, further challenging Schiff’s anti-crypto rhetoric and reinforcing Bitcoin’s appeal as a modern alternative to traditional investment vehicles like gold.

Conclusion

Peter Schiff’s gold tokenization project has sparked widespread debate among investors and blockchain enthusiasts. While Schiff sees his initiative as a way to modernize gold investment, critics like CZ argue that it runs counter to blockchain’s core values of decentralization and trustlessness. Combined with gold’s recent price slump and Schiff’s unmet predictions, the project faces increasing scrutiny in both traditional and crypto-focused financial circles. As Bitcoin continues to demonstrate its durability in a turbulent market, Schiff’s gold-backed tokens may struggle to achieve meaningful traction.