CZ Declares Tokenized Gold a 'Trust Token,' Challenging RWA Decentralization

Executive Summary

Binance co-founder Changpeng Zhao (CZ) recently stated that tokenized gold, including Peter Schiff’s new product, relies on third-party trust rather than true on-chain ownership, sparking significant debate on real-world asset (RWA) tokenization within the crypto market.

The Event in Detail

On October 23, 2025, Changpeng Zhao (CZ), co-founder and former CEO of Binance, publicly shared his perspective on tokenized gold, describing it as a "trust me bro" asset. His comments followed the announcement by prominent gold advocate Peter Schiff regarding his plans to launch a blockchain-based tokenized gold product, enabling users to buy and trade gold via a mobile application. CZ’s core argument centers on the assertion that tokenized gold is not "truly on-chain" because its underlying value and redemption depend entirely on the promise of a third-party intermediary. He elaborated that the act of tokenizing gold necessitates trusting an entity to deliver the physical asset, potentially decades into the future, even amidst organizational changes or geopolitical instability. This inherent reliance on an intermediary, according to CZ, renders tokenized gold functionally similar to assets within traditional financial systems, where centralized entities manage access and redemption processes.

Market Implications

CZ’s statement carries significant implications for the burgeoning Real-World Asset (RWA) tokenization trend. The financial mechanics of commodity-backed stablecoins, such as tokenized gold, typically involve a custodian holding the physical asset. Each token represents a digital claim on a specific amount of the underlying commodity. This custodial model, while facilitating digital ownership and transfer, introduces a centralized point of trust that CZ argues deviates from the core decentralization tenets of blockchain technology. This creates a critical distinction between purely decentralized digital assets and asset-backed tokens that still incorporate elements of centralized trust.

From a business strategy and market positioning perspective, Peter Schiff’s pivot to launching a tokenized gold product is noteworthy. Historically, Schiff has been a vocal critic of Bitcoin and the broader cryptocurrency market. His decision to leverage blockchain technology for gold tokenization suggests a grudging acknowledgment of the technology's foundational utility, even while he maintains his skepticism regarding "worthless strings of numbers" like Bitcoin. This move aligns with the growing sentiment that RWA tokenization represents a significant financial wave, potentially unlocking trillions in global markets, and demonstrates that even staunch skeptics are now exploring ways to integrate with blockchain infrastructure.

The broader market implications for the Web3 ecosystem are substantial. CZ’s challenge forces a re-evaluation of what constitutes a "truly on-chain" asset and whether current RWA tokenization models adequately deliver blockchain-native benefits such as transparency, immutability, and reduced reliance on intermediaries. If RWA tokenization merely digitizes existing trust-based systems without fundamentally altering the trust paradigm, it risks exposing investors to similar risks found in traditional finance, potentially undermining the transformative potential associated with Web3 principles. This debate may catalyze the development of more robust and transparent RWA models designed to minimize third-party trust or, at minimum, clarify expectations for users regarding the level of decentralization in tokenized physical assets.

Expert Commentary

Commenting on the nature of tokenized assets, CZ directly stated that tokenized gold is a "trust me bro" asset, implying that it is not truly "on-chain gold." He emphasized that this concept is generally understood by individuals within the crypto community, but may not be clear to those outside of it. This perspective suggests that for RWA tokenization to fully align with the foundational principles of Web3, it must move beyond simply digitizing existing trust-based systems. The underlying concern is that without addressing this fundamental layer of reliance on centralized trust, certain forms of RWA tokenization might not fully realize the disruptive potential often attributed to Web3, and could still present investors with risks akin to those found in conventional financial frameworks.

Broader Context

Peter Schiff’s entry into the tokenized gold market, following years of public skepticism and criticism directed at Bitcoin and other cryptocurrencies, represents a significant shift. For over a decade, Schiff consistently ridiculed Bitcoin, advocating for traditional gold as the superior store of value. His decision to now launch a blockchain-based gold token has been described by observers as an ironic validation of the very technology he has long attacked. While Schiff continues to assert that "tokenising Real Assets Adds Value" in contrast to "tokenizing nothing" (a reference to Bitcoin), his engagement with blockchain technology underscores its growing foundational role across various asset classes. This development highlights that blockchain is no longer a fringe technology but a critical infrastructure. Furthermore, it reinforces the view that Real-World Asset (RWA) tokenization is poised to become a significant market trend, attracting participation even from historically critical figures seeking to monetize the movement. Bitcoin’s role in demonstrating blockchain’s resilience and pioneering the infrastructure now being adopted by tokenized asset projects is therefore implicitly acknowledged through this broader industry evolution.