- Changpeng Zhao (CZ) criticizes Peter Schiff’s tokenized gold plan as custodial product.
- CZ argues tokenized gold relies on central parties rather than true blockchain ownership.
- Gold prices dropped below $4,100 on Wednesday despite Schiff’s $6,000 Christmas forecast.
Binance founder Changpeng Zhao has responded to Peter Schiff’s recent announcement about launching a tokenized gold product. CZ’s critique focuses on the fundamental limitations of such offerings rather than the asset itself.
Schiff, who has spent years criticizing Bitcoin and predicting price crashes, revealed plans to create a blockchain-based gold token. The product aims to make gold more accessible and transferable through digital infrastructure. This pivot toward blockchain technology has drawn attention given Schiff’s history of dismissing cryptocurrency.
CZ highlights custodial trust issues
CZ pointed out that tokenized gold products typically represent digital claims on physical metal stored in vaults. These tokens depend on central custodians to maintain the backing, creating a trust-based system rather than true on-chain ownership. Users do not actually hold gold through the blockchain but instead rely on promises from the issuing entity.
The Binance founder compared this structure to traditional banking arrangements. If the custodian faces bankruptcy, security breaches, or changes in management, the guarantees backing the tokens could fail. Physical gold may endure across decades, but institutional promises do not always survive economic turmoil or conflict.
CZ questioned whether third parties can reliably honor their commitments years into the future during periods of war or financial chaos. He described Schiff’s proposed product as a “trust me bro” token, suggesting it fails to deliver the trustless benefits that blockchain technology promises.
Gold faces criticism amid price decline
The former Binance CEO argued this custodial limitation explains why tokenized gold products have not gained widespread adoption. While Schiff positions the offering as convenient access to gold exposure, CZ maintains that genuine innovation should eliminate the need to outsource trust to centralized entities.
Schiff has faced additional scrutiny within the crypto community after gold prices fell to record lows on Wednesday, October 22, 2025. The precious metal dropped below $4,100, contradicting Schiff’s earlier prediction that gold would reach $6,000 by Christmas and outperform both Bitcoin and the S&P 500.
Veteran trader Peter Brandt highlighted gold’s investment history, sharing chart data showing the asset has delivered an average annual return of just 3.6% over the past 45 years. The data also revealed multiple periods of deep and prolonged consolidation despite gold’s reputation as a stable store of value.
Bitcoin continues to experience volatility but has shown signs of recovery in recent trading sessions. The contrast between gold’s recent performance and Schiff’s bullish forecast has intensified debate about the merits of traditional versus digital assets.
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