Gold Token Market Tops $3.9B as CZ Calls Them ‘Trust Me Bro’ Assets
As gold prices stabilize around $4,100 per ounce, crypto tokens backed by the metal are attracting growing interest. The total market capitalization of gold tokens has climbed to roughly $3.86 billion, fueled by XAUT ($4,144) and Paxos Gold (PAXG), according to CoinGecko.
However, Binance co-founder and former CEO Changpeng Zhao (CZ) warned that these tokens are only as reliable as the promises supporting them.
“Tokenizing gold is NOT ‘on-chain’ gold,” CZ wrote on X. “It’s trusting a third party to deliver gold at some future date — possibly decades later, after management changes, or even during a war.”
This reliance on centralized issuers exposes token holders to risks similar to those seen with stablecoins, whose value is pegged to fiat currencies like the U.S. dollar. A report from NYDIG notes that even widely used stablecoins such as USDC and USDT can lose their peg under extreme market stress. During the recent $500 billion crypto sell-off, Ethena’s USDe briefly fell to $0.65, while USDC and USDT remained above $1.
Tokenized gold may be attractive as a hedge, but it carries hidden vulnerabilities.
“It’s a ‘trust me bro’ token,” CZ added. “This is why no gold coins have really scaled.”
Even the largest gold token, Tether Gold (XAUT), has a market cap of $2.1 billion, compared with USDT at $183 billion, highlighting the disparity in scale and trust between gold-backed and dollar-pegged crypto assets.
