Peter Schiff, a well-known figure in the crypto industry, has announced his plans to explore a new way of digitizing bullion using blockchain technology. Schiff, who is known for his criticism of Bitcoin and advocacy for gold, revealed his intentions to launch a tokenized gold platform during an interview on CounterParty TV posted on October 23rd.
The platform will include a debit card that allows users to buy, hold, and spend tokenized gold while the physical metal is securely stored in vaults. During the interview, Schiff took the opportunity to critique Bitcoin, stating:
“Ideally, the one thing that makes sense to put on a blockchain is gold. 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 store of value. And I’m probably going to launch my own token at some point.”
Schiff described the upcoming platform as a solution to make gold holdings easily portable and spendable, allowing users to manage their tokenized gold through a mobile app, spend fractions using a debit card, and transfer ownership on-chain.
While the platform will not physically deliver the gold to users, the metal will remain stored in a vault. However, users will have the ability to transfer ownership of the tokenized gold to others and redeem their tokens for physical gold. Schiff did not specify any geographical or national limitations for ownership or transfer.
Tokenized Commodities
Tokenized commodity sector by asset. Source: RWAxyz
Schiff’s platform is entering a rapidly growing tokenized commodity sector, which has seen a 36% increase in the past month, according to data from RWAxyz. The sector is primarily dominated by two tokenized gold products, Tether Gold (XAUT) and Paxos Gold (PAXG), which together represent over 80% of the $3.53 billion market with a total tokenized value of $2.9 billion.
With trading volumes in tokenized gold on the rise, Schiff’s optimism may be fueled by the recent rally in the spot price of gold.
Over the last month, the combined trading volume of XAUT and PAXG reached over $16.5 billion, marking an all-time high and a 2,760% increase from January, according to data from DefiLlama.
‘Trust Me Bro’ Token
Schiff’s plan has received mixed reactions from the crypto community, with some expressing skepticism and others offering support.
Eric Balchunas, a senior ETF analyst for Bloomberg, jokingly remarked, “Congratulations, you just invented an ETF,” highlighting existing options like VanEck’s OUNZ and Goldman Sachs’ AAAU, which allow investors to redeem their shares for physical gold stored in vaults.
Binance founder Changpeng Zhao criticized Schiff’s proposed product, labeling it as “not ‘on chain’ gold” and referring to it as a “‘trust me bro’ token” due to its reliance on third-party custodians for redemption.
In response to Zhao’s criticism, Schiff challenged him to a debate comparing Bitcoin and tokenized gold, aiming to discuss which asset better serves as a medium of exchange, unit of account, and store of value. While Zhao agreed to the debate, details regarding the timing and location are yet to be confirmed.