"Gold Godfathers" engage in heated debate: CZ: Who truly deserves the title of "Digital Gold"?

Author: imToken

If tokenized gold like XAUT and BTC were placed in front of you simultaneously, which would you choose?

As we all know, gold is a symbol of "hard currency" in the TradFi world, and Bitcoin is considered "digital gold" in the Crypto world. Therefore, as gold accelerates its on-chain integration, the boundary between the two is becoming more blurred than ever before.

Against this backdrop, an interesting debate has reignited this topic—"Gold Godfather" Peter Schiff officially challenged CZ on the topic of "Bitcoin vs. Tokenized Gold." The clash of these two viewpoints actually reveals a larger question:

In the new era where RWA is gradually integrating into Web3, can "trust" truly be completely replaced by code?

The Debate Between the "Gold Godfather" and CZ

Looking back at historical pronouncements, Peter Schiff is undoubtedly one of the most staunch critics of Bitcoin.

In his view, Bitcoin is merely an illusion for speculators, gold is the true return to currency, and "tokenized gold" is the bridge for the gold standard to further enter the digital age—possessing both the physical backing of gold and the advantages brought by blockchain.

This also means that Peter Schiff firmly stands on the side of "intrinsic value" and "physical reliability."

CZ's response was direct and sharp, pinpointing the fundamental weakness of tokenized gold: "Tokenized gold is not true on-chain gold; it is still built on trust. Users trust that the issuer will fulfill its obligations in the future, not that the code directly guarantees it." In short, even projects like Tether Gold (XAUT) backed by Tether and others, in extreme situations such as war, management changes, or regulatory conflicts, users still need to rely on the continuation of the traditional system. Objectively speaking, CZ is not wrong. Tokenized gold projects like XAUT are essentially asset mappings based on institutional credit and cannot completely escape centralized dependence. However, Schiff's viewpoint is not entirely wrong either, because he takes the perspective of "intrinsic value versus physical reliability." Ultimately, the debate between Schiff and CZ is not a matter of right or wrong value judgments, but rather a clash between two different "reliability models": the former is physical reliability (based on the scarcity of gold), and the latter is system reliability (based on trustless code). To deeply understand the positioning of tokenized gold as an asset mapping and its limitations in reliability, we must first review how traditional finance deals with physical gold. From Paper Gold to Tokenized Gold: Evolution and Compromise

Long before tokenized gold products like XAUT appeared, TradeFi had already begun experimenting with "certifying" gold, most typically through "paper gold."

As the name suggests, paper gold is a bank's gold savings account or a gold ETF without physical delivery. It can be simply understood as a credit certificate, meaning that users no longer directly own gold but hold a bank's "credit commitment." Gold or other precious metals are bought and sold through a paper gold account without any physical delivery.

This solves the problems of physical gold being difficult to divide and inconvenient to carry, making gold lighter and more liquid. Paper gold products offered by various banks have indeed provided many users with convenient opportunities to invest in and hold gold.

Source: Bank of China (Hong Kong)

But ultimately, the foundation of this type of model still lies in "centralized single-point trust," because it relies on the credit backing of financial institutions, allowing banks to issue certificates exceeding their actual gold reserves (i.e., over-issuance). Furthermore, during financial crises or large-scale bank runs, holders of paper gold may not be able to fully redeem the physical gold, facing credit risk and redemption risk.

Unless products with strong credit backing, such as those from large state-owned banks, can minimize this risk. In other words, **paper gold allows users to sacrifice certainty in exchange for liquidity and convenience.** The emergence of tokenized gold such as XAUT can be seen as a blockchain upgrade of "paper gold": it continues the mapping logic of "gold reserves + digital certificates," moving the certificates from bank ledgers to a public blockchain that anyone can view—taking Tether's XAUT as an example, each XAUT reportedly represents one ounce of gold stored in a Swiss vault, and users can hold, transfer, or trade these tokens 24/7 through their wallets. The biggest advantage of this model is that it provides gold with 24/7 global liquidity; other dimensions are not much different from "paper gold," meaning users no longer need to bear the storage and transportation costs of gold bars; finally, small investors can also hold gold through fragmented tokens. However, Tether Gold is not a "completely trustless" system; its security and stability still depend on Tether's own reserve disclosure, custody arrangements, and legal framework. While Tether claims that every XAU₮ is backed by physical gold, it remains difficult for outsiders to independently verify the vault's condition, the independence of the audit, or even its redeemability under extreme conditions. In short, XAUT is a disruptive upgrade to the paper gold model, combining direct ownership of physical gold (a commitment to full reserves) with the efficient transfer of cryptocurrencies (on-chain tokens), but still retaining the institutional credit risk inherent in centralized issuance. The Fate of RWA: The Inescapable Centralized Trade-off This reliability dilemma of tokenized gold also reflects the fundamental difference between all RWA/mapped assets and native on-chain assets, highlighting the contradiction between efficiency and ideals in Web3 development. This includes stablecoins, especially the long-standing debate between "centralized stablecoins" and "decentralized stablecoins," which has been a central theme in the crypto narrative: Algorithmic stablecoins (such as UST): attempting to completely break free from centralization and create value through algorithms, but their rapid rise and fall prove that pure code trust is extremely fragile without physical support; Centralized stablecoins (such as USDC): the 2023 Silicon Valley Bank crisis severely damaged USDC, exposing its over-reliance on the traditional banking system and centralized regulation; Decentralized stablecoins (DAI/USDS): long attempting to maintain decentralization through over-collateralization of crypto assets, but in order to improve scale and stability, they have had to gradually introduce RWA. Using assets as collateral is inherently a compromise with trust in physical assets; it can be said that, apart from BTC and ETH, the fate of stablecoins, XAUT, and other RWA assets is that they cannot escape centralization. This is because the essence of RWA is "mapping the value of off-chain assets onto the blockchain," a process that inevitably requires the issuing entity to promise 1:1 redemption, while a regulated custodian securely stores the physical assets, and the legal framework must ensure that token holders have legal recourse. The final trade-off is quite straightforward—XAUT is more conservative in terms of asset value and has physical backing than BTC; however, BTC is more censorship-resistant and more decentralized in its system architecture than XAU₮. From this perspective, neither Schiff nor CZ is wrong; they are simply defending two different future models: Schiff's future (RWA): "Digital efficiency + physical reliability," sacrificing decentralization but ensuring value endorsement; CZ's future (BTC): "Code trust + decentralization," sacrificing intrinsic value but ensuring system resistance to censorship; This also suggests that Web3 will not be a purely code-driven world, but rather an ecosystem where code trust and physical trust coexist.