A fresh debate has erupted across the crypto industry after Binance founder Changpeng “CZ” Zhao dismissed the concept of tokenized gold as “not truly on-chain.” His remarks, aimed at gold advocate and Bitcoin critic Peter Schiff, have reignited long-standing tensions between traditional asset tokenization and decentralized trust models.

⚖️ The Gold vs. Crypto Clash

The controversy began after Schiff announced plans to launch a blockchain-based tokenized gold platform through his company Shift Gold.
The project promises users the ability to:

• Purchase and store real gold in secured vaults.

• Transfer digital ownership via blockchain.

• Redeem their holdings for physical gold at any time.

Schiff described the system as a way to combine the stability of gold with the efficiency of blockchain, calling gold “the one thing that truly makes sense to put on a blockchain.”

However, CZ strongly disagreed. In a post on X (formerly Twitter), he argued that tokenizing physical assets like gold still requires trust in centralized custodians, which undermines the blockchain’s purpose.

“Tokenizing gold is NOT ‘on-chain’ gold,” CZ wrote.
“It’s tokenizing the trust that some third party will give you gold later — maybe decades later, during a war, or after management changes. It’s a ‘trust me bro’ token.”

💬 Why It Matters

CZ’s comments touch on one of the most fundamental debates in blockchain philosophy — whether physical assets can ever be truly decentralized.
While tokenized gold markets have grown rapidly (reaching over $3.75 billion in market capitalization, per CoinGecko), critics argue they reintroduce the same counterparty risk that cryptocurrencies were designed to eliminate.

For CZ and many crypto purists, Bitcoin represents self-custody and mathematical trust, while tokenized assets rely on institutional intermediaries.

🏦 Tokenization’s Growing Popularity

Despite the criticism, the tokenization of real-world assets (RWAs) continues to gain traction. Major financial institutions and fintech firms are exploring blockchain-based representations of:

• Gold and commodities

• Bonds, real estate, and equities

• Luxury goods and collectibles

Supporters claim this trend can increase liquidity, transparency, and accessibility in traditional markets — but CZ’s remarks highlight how the “trust problem” remains unresolved.

🌐 The Bigger Picture

The CZ–Schiff debate perfectly encapsulates the crossroads between Web3 philosophy and financial pragmatism:

• Schiff’s stance: Blockchain can make traditional assets like gold more efficient and secure.

• CZ’s view: Without eliminating trust, such assets remain centralized and vulnerable.

As tokenization continues to expand, the industry must decide whether “on-chain” means true decentralization — or simply a digital version of legacy finance.