Gold-Backed Tokens Hit $3.86B Amid Skepticism from CZ
Gold-backed crypto tokens are gaining traction even as gold prices stabilize near $4,100 per ounce, yet concerns over trust and reliability persist.
Market data from CoinGecko shows the total capitalization of gold tokens has reached $3.86 billion, driven by strong performance from XAUT ($4,148.53) and Paxos Gold (PAXG).
However, Binance co-founder and former CEO Changpeng Zhao (CZ) cautioned investors, noting that these tokens are not truly “on-chain” gold. “It’s tokenizing your trust in a third party to deliver gold later—even decades from now or during unforeseen crises,” CZ wrote on X.
These tokens share similar risks with stablecoins, which depend on centralized issuers. NYDIG highlighted that even well-known dollar-pegged tokens like USDC and USDT can break their pegs during extreme market stress.
During the recent $500 billion crypto market sell-off, for example, Ethena’s USDe fell as low as $0.65 on Binance, while USDC and USDT remained near $1.
While gold tokens offer a hedge against market volatility, their reliance on trust limits broader adoption. “It’s a ‘trust me bro’ token,” CZ added, underscoring why no gold-backed coin has achieved mass acceptance.
Tether Gold, the largest gold token by market cap, stands at $2.1 billion—still small compared to USDT’s $183 billion—highlighting the gap between potential and scale in tokenized gold markets.
