The recent surge in global gold prices has reignited debate over one of crypto’s most polarizing innovations: tokenized gold.
As traditional investors look for inflation hedges and digital asset advocates push real-world tokenization, opinions are sharply split on whether these tokens represent genuine value or yet another layer of financial abstraction.
Gold’s Rise Rekindles Interest in Digital Bullion
Gold has been on a three-year rally, climbing to an all-time high of $4,380 per ounce in October before settling near $4,100. This renewed momentum has spilled into the crypto sector, where tokenized versions of the precious metal are being touted as a bridge between traditional wealth storage and modern blockchain liquidity.
Peter Schiff reveals he’s launching his own tokenized gold platform and neobank
“I'm building out a platform where you can 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" pic.twitter.com/U0KwLZWnJJ
— CounterParty TV (@counterpartytv) October 22, 2025
Tokenized gold projects essentially create blockchain-based tokens backed by physical gold reserves, allowing users to trade exposure to the metal without the logistical burden of owning or storing it. The idea has attracted both innovators and skeptics, as questions persist over whether such assets are truly “on-chain gold” or merely representations of third-party promises.
Peter Schiff Enters the Tokenization Arena
Economist Peter Schiff, a vocal critic of Bitcoin and a long-time advocate for physical gold, has unexpectedly stepped into the blockchain sector. Schiff recently announced plans to launch a tokenized gold platform and a corresponding neobank that will issue digital tokens representing real gold holdings.
The token, known as Tgold, is designed to make gold ownership more portable and accessible. Schiff claims this approach solves one of the metal’s biggest limitations – its lack of liquidity compared to digital assets.
As I've been saying, tokens backed by something have value. Tokens backed by nothing, like Bitcoin, have none. Ironically, the asset that lends itself best to tokenization is gold. At some point Schiff Gold will be launching one of our own. Be on the lookout for Tgold. https://t.co/AMDiXFFjiu
— Peter Schiff (@PeterSchiff) September 9, 2025
Despite his usual criticism of cryptocurrencies, Schiff predifcts that tokenized gold will eventually capture part of Bitcoin’s market share by offering tangible backing combined with blockchain convenience. His move has been viewed by some as a validation of real-world asset (RWA) tokenization, an emerging narrative that links traditional commodities with digital networks.
CZ Pushes Back Against “Trust-Based” Tokens
Not everyone shares Schiff’s optimism. Changpeng Zhao (CZ), the former CEO of Binance, dismissed the concept as an illusion of decentralization. Writing on X, CZ argued that tokenized gold does not equate to holding gold directly but rather depends entirely on trust in a custodian’s promise.
Saying the obvious. Most people “in crypto” know this, most people “not in crypto” may not understand yet.
Tokenizing gold is NOT “on chain” gold.
It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe… https://t.co/KMYfz2dG04
— CZ 🔶 BNB (@cz_binance) October 23, 2025
Other financial analysts joined the critique. Shanaka Anslem Perera, a market researcher, described tokenized gold as “a repackaged version of 20th-century custodial finance dressed in 21st-century code.” He pointed to historical precedents – from the 1933 Gold Confiscation to the 1971 U.S. gold window closure – as reminders that physical gold under third-party control can be seized, restricted, or defaulted upon.
Perera’s argument, echoed by many traditionalists, highlights the central risk that tokenized gold investors face: custodial failure. If the underlying reserves cannot be verified or accessed, the token’s promise of “backing” could evaporate overnight.
Industry Remains Divided
These conflicting viewpoints have fueled heated discussions across financial and crypto circles. Supporters see tokenized gold as a practical evolution of the precious metal, offering global liquidity, fractional ownership, and easier settlement. Critics view it as a step backward – replacing self-custody and sovereignty with digital IOUs dependent on corporate intermediaries.
Despite skepticism, the sector continues to grow rapidly. The market capitalization of tokenized gold products now exceeds $3.8 billion, with Tether Gold (XAUT) and PAX Gold (PAXG) leading the market, holding over $1.5 billion and $1.3 billion in assets respectively, according to data from RWA.xyz.
The Road Ahead for Digital Gold
While the debate over tokenized gold’s legitimacy continues, its market trajectory remains unmistakably upward. For some, it represents a seamless blend of blockchain efficiency and tangible value; for others, it is simply a high-tech version of old-world trust.
What is clear, however, is that the conversation surrounding tokenized commodities has expanded beyond theory. With gold at historic highs, institutional products like Bitwise’s proposed tokenization ETF, and ongoing experiments from figures like Schiff, the race to define the next evolution of “digital gold” is already underway.
Whether tokenized gold will prove to be a revolution in asset mobility or another fragile financial construct built on promises remains one of the defining questions for the next phase of the crypto economy.
