Gold Token Market Surpasses $3.9B as Binance’s CZ Labels It a ‘Trust Me Bro’ Asset

Gold Token Market Hits $3.9B as CZ Flags ‘Trust Me Bro’ Risks

As gold prices stabilize around $4,100 per ounce, tokens pegged to the precious metal are seeing rising interest in crypto markets. The total market capitalization of gold tokens has climbed to roughly $3.86 billion, led by XAUT ($4,144) and Paxos Gold (PAXG), according to CoinGecko.

Yet, Binance co-founder and former CEO Changpeng Zhao (CZ) cautions that these assets carry significant trust risks.

“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, under changing management or even during a war.”

This reliance on centralized issuers to guarantee physical gold exposes similar vulnerabilities to those seen in stablecoins, whose value is pegged to fiat currencies like the U.S. dollar.

A report from NYDIG highlighted that even widely used stablecoins such as USDC and USDT can lose their peg during periods of extreme market stress. For instance, during the recent $500 billion crypto market sell-off, Ethena’s USDe fell as low as $0.65, while USDC and USDT remained above $1.

While tokenized gold can serve as a hedge, the risks of issuer default or operational failure remain.

“It’s a ‘trust me bro’ token,” CZ added. “This is why no gold coins have truly scaled.”

Even the largest token, Tether Gold (XAUT), has a market cap of $2.1 billion, dwarfed by its dollar-pegged counterpart USDT, which stands at $183 billion.

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