CZ slams tokenized gold as a ‘trust me bro’ asset class
Changpeng Zhao (CZ), co-founder of Binance, criticized tokenized gold products on October 23, calling them “trust me bro” assets that rely on an intermediary rather than true on-chain ownership.
In a public social-media post, CZ argued that gold-backed tokens, including those linked to Peter Schiff’s recently announced digital-gold project, depend on third-party promises to hold and redeem physical bullion. This means the token itself lacks the decentralized, immutable qualities normally associated with blockchain assets.
Peter Schiff’s latest venture, by the way, marks a sharp turn from his long-time criticism of cryptocurrencies. The veteran gold advocate announced the upcoming launch of a gold-backed token and companion neobank, offering gold-denominated accounts, debit cards and the ability to spend gold digitally with automatic settlement via physical bullion.
The tokenized gold market has grown rapidly this year, reaching around US$3.71 billion in 2025, up from roughly US$500 million earlier in the year. This surge builds on fractional ownership and blockchain transfers, but still anchored by custodial trust.
Industry observers point out that the recent boom in real-world asset (RWA) tokenization has brought attention to the gap between tokenized claims and physical asset custody. Scams in gold-linked tokens have previously surfaced, including a 2022 case where the U.S. Securities and Exchange Commission (SEC) sued a company for falsely claiming its tokens were backed by US$10 billion of gold.
Tokenized gold products promise to bridge the physical-asset world with blockchain efficiency, but several cautionary issues persist. Academic research on tokenized commodities highlights that fraud risks remain significant when underlying assets are misrepresented, audits are opaque or custodians lack rigorous controls. Developers note that tokenizing real-world assets introduces friction when verifying ownership of the physical asset or enforcing legal rights tied to the tokenized representation.
One illustrative example is the Perth Mint Gold Token (PMGT), which once carried the weight of a government-backed bullion institution but encountered a string of controversies. The Singaporean-based issuer under license from Perth Mint announced in March 2023 that it would cease support for the token, citing ongoing investigations into alleged breaches of Australian and U.S. rules by the mint and the issuer’s reassessment of risk.
Specifically, investigations by Australia’s financial-crime regulator (AUSTRAC) and acknowledged historic non-compliance with the U.S. Model Commodity Code by the mint exposed structural vulnerabilities in the token’s design.
CZ’s critique summed up the tension running through the sector. He warned that tokenized gold remains an “illusion of decentralization,” dependent on trust in issuers to store and redeem metal rather than verifiable on-chain proof. His comment landed amid renewed retail interest in tokenized commodities, therefore highlighting a fundamental paradox: blockchain promises transparency, yet gold-backed tokens still hinge on custodial credibility - the very weakness crypto was meant to solve.
Industry observers point out that the recent boom in real-world asset (RWA) tokenization has brought attention to the gap between tokenized claims and physical asset custody. Scams in gold-linked tokens have previously surfaced, including a 2022 case where the U.S. Securities and Exchange Commission (SEC) sued a company for falsely claiming its tokens were backed by US$10 billion of gold.
Tokenized gold products promise to bridge the physical-asset world with blockchain efficiency, but several cautionary issues persist. Academic research on tokenized commodities highlights that fraud risks remain significant when underlying assets are misrepresented, audits are opaque or custodians lack rigorous controls. Developers note that tokenizing real-world assets introduces friction when verifying ownership of the physical asset or enforcing legal rights tied to the tokenized representation.
One illustrative example is the Perth Mint Gold Token (PMGT), which once carried the weight of a government-backed bullion institution but encountered a string of controversies. The Singaporean-based issuer under license from Perth Mint announced in March 2023 that it would cease support for the token, citing ongoing investigations into alleged breaches of Australian and U.S. rules by the mint and the issuer’s reassessment of risk.
Specifically, investigations by Australia’s financial-crime regulator (AUSTRAC) and acknowledged historic non-compliance with the U.S. Model Commodity Code by the mint exposed structural vulnerabilities in the token’s design.
CZ’s critique summed up the tension running through the sector. He warned that tokenized gold remains an “illusion of decentralization,” dependent on trust in issuers to store and redeem metal rather than verifiable on-chain proof. His comment landed amid renewed retail interest in tokenized commodities, therefore highlighting a fundamental paradox: blockchain promises transparency, yet gold-backed tokens still hinge on custodial credibility - the very weakness crypto was meant to solve.
Author
Sebile Fane cut her teeth in blockchain by building tiny NFT experiments with friends in her living room, long before the buzzwords took hold. She’s driven by a curiosity for the human stories behind smart contracts — whether it’s a small-town artist minting her first token or a DAO voting on climate grants — and weaves technical insight with genuine empathy.
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