Peter Schiff, known in the crypto industry as a Bitcoin critic and gold advocate, announced that he is exploring a new way to make precious metal digital – via blockchain. Schiff revealed his plans for a tokenized gold platform during an interview on CounterParty TV posted yesterday, October 23.
The proposed platform includes a debit card that allows users to buy, hold and spend tokenized gold, while the precious metal is kept in vaults. Schiff didn’t miss an opportunity to criticize Bitcoin when he explained his upcoming product in the interview:
“Ideally, gold is the only thing that makes sense to put on a blockchain. Because it will work. And it will do all the things that Bitcoin promises but can never do. You can use tokenized gold as a medium of exchange, as a unit of account, as a story of value. And I will probably launch my own token one day.”
Schiff described the emerging platform as a way to make gold portable and spendable, allowing users to manage their tokenized gold in a mobile app, spend fractions via a debit card and transfer ownership off-chain.
He also noted that the platform “won’t send you the actual gold” because the metal will remain stored in a vault, but users will be able to “transfer ownership of that gold to other people” and exchange their tokenized gold for physical gold, he said. Schiff did not specify whether there will be geographic or national restrictions on ownership or transfer.
Tokenized commodities
Tokenized commodity sector by asset. Source: RWAxyz
Schiff’s platform will enter a fast-growing tokenized commodity sector, which is up more than 36% in the past month, according to data from RWAxyz. The sector is dominated by two tokenized gold products, Tether Gold (XAUT) and Paxos Gold (PAXG), which together account for $2.9 billion in tokenized value, more than 80% of the $3.53 billion market.
Schiff’s bullish stance may be fueled by growing trading volumes in tokenized gold in particular, as the spot price of gold has risen in recent months.
Last month, total trading volume of XAUT and PAXG spiked above $16.5 billion, marking an all-time high and a 2,760% increase from January this year, according to DefiLlama data.
‘Trust me brother’ token
While details were scarce, Schiff’s plan drew swift and mixed reactions from the crypto community.
Eric Balchunas, senior ETF analyst at Bloomberg, joked in response to the interview: “Congratulations on just inventing an ETF,” adding that investors already have options like VanEck’s OUNZ and Goldman Sachs’ AAAU, which store physical gold in vaults and let shareholders exchange their shares for real gold.
Binance founder Changpeng Zhao — who was pardoned by President Doland Trump yesterday after pleading guilty in November 2023 to repeatedly violating U.S. anti-money laundering regulations — criticized Schiff’s proposed product, calling it “not ‘on chain’ gold” and calling it a “trust me bro token” due to its reliance on third-party custodians for redemption.
“Tokenizing gold is NOT ‘on chain’ gold. It means trusting a third party to give you gold at a later date, even after their management has changed, perhaps decades later, during a war, etc.,” Zhao wrote on X.
However, Zhao’s criticism was put under pressure when Wintermute CEO Evgeny Gaevoy noted in a follow-up response that the same argument could apply to crypto assets packaged through centralized entities such as WBTC/cbBTC or SOL on BNB Chain.
“[…] and you can make the same argument for storing your crypto on centralized exchanges,” Gaevoy added in a direct comment to the CEX founder.
In response to Zhao’s criticism, Schiff publicly challenged him to a debate comparing Bitcoin and tokenized gold, with the aim of discussing which asset can better serve as a medium of exchange, unit of account, and store of value. Binance’s founder agreed to the debate, although details on when and where it will take place have not been confirmed at the time of writing.