The Spark: Tokenized Gold's Unexpected Agreement
Binance founder Changpeng “CZ” Zhao and gold advocate Peter Schiff engaged in a prominent debate at Binance Blockchain Week in Dubai on Thursday. This highly anticipated session, billed as a clash between two long-standing rivals, lived up to expectations. While the two have frequently exchanged barbs on Twitter over the years, the discussion began with a surprising point of consensus: tokenized gold might surpass physical bars as a preferred form of money.
Schiff introduced his new platform, TGold, which offers vaulted, allocated metal and will eventually allow users to withdraw either physical gold or a token representing ownership. He explained, "Because the token is divisible, you can transfer any portion of it to someone else, and that transfer gives them ownership of the gold without moving the physical metal." CZ echoed this sentiment, stating, "Tokenized gold is actually almost better than the gold itself … divisible, transferable, transportable." This brief moment of alignment dissolved as the debate shifted to the purpose and value of bitcoin, and the fundamental question of what should back digital money.
Schiff's Critique: Bitcoin's Shortcomings as Money
Schiff argued that bitcoin functions similarly to fiat money because "it’s backed by nothing," asserting that it lacks intrinsic value. He contrasted this with tokenized gold, which he believes has a clear source of worth. For bitcoin, he contended, "it doesn’t have a utility beyond the fact that I can transfer it to you and you can transfer it to somebody else." He further questioned bitcoin's practicality in commercial transactions. "Nothing is priced in bitcoin," Schiff declared, noting that merchants ultimately receive fiat currency. "You’re selling your bitcoin and then you’re paying with currency," he stated. In his view, using bitcoin at the point of sale is akin to selling an asset rather than spending money.
Schiff presented bitcoin’s recent performance as evidence of waning demand, highlighting that it "buys 40% fewer ounces of gold today than it did four years ago." He maintained that despite the introduction of bitcoin ETFs, corporate acquisitions, and significant hype, its fundamental weakness persists. "All Bitcoin does is enable a transfer of wealth from the people who buy … to the people who sell," Schiff concluded.
CZ's Defense: Bitcoin's Value and Real-World Utility
CZ countered the notion that bitcoin's digital nature diminishes its value. "Bitcoin actually doesn’t exist anywhere … but it doesn’t mean that because it’s virtual, it has no value," he argued, drawing parallels to widely accepted virtual products like X and Google. He characterized bitcoin as "a new technology for money" supported by a decentralized global network.
Utility was a central theme in CZ's rebuttal. He pointed to the increasing use of crypto-linked cards for real-world spending. Demonstrating a Binance card, he asserted that users are indeed paying with crypto: "From the user perspective, he just swiped his card and crypto gets deducted." He contended that the underlying conversion process does not negate the fact that bitcoin is being utilized in everyday transactions. CZ also addressed Schiff's emphasis on gold's permanence, where Schiff noted that "ancient gold still circulating today." CZ countered by highlighting the uncertainty surrounding gold's true supply, contrasting it with bitcoin's precisely defined supply. "With Bitcoin, we know exactly how much there will be, and we know exactly where they are," he stated. He disputed Schiff's assertion that bitcoin primarily benefits sellers, asking, "How many people made money on Bitcoin?" referencing its significant price appreciation from fractions of a cent to tens of thousands of dollars. He shared an anecdote about a user in Africa who leveraged crypto to reduce bill payment times from three days to three minutes, enabling them to save their initial $1,000.
The Stalemate: Divergent Views on Digital Currency's Future
The session concluded with both participants firmly holding their positions. CZ expressed optimism, predicting that "Bitcoin will do even better" than gold in the long term. Schiff, conversely, maintained that growing interest in precious metals will ultimately eclipse demand for cryptocurrencies. The exchange underscored the significant evolution in the discourse surrounding digital money. Tokenized commodities are now attracting interest from established gold proponents, while bitcoin's advocates continue to emphasize its on-chain payment capabilities and its expanding global user base as indicators of sustained demand. Although the fundamental divide between their perspectives remains pronounced, the areas of overlap, particularly concerning tokenization, have expanded considerably.