Stablecoin Wars Escalate: Peter Schiff Bets Big on Gold-Backed Crypto in High-Stakes Showdown

The stablecoin arena turns bloody as goldbug Peter Schiff enters the ring—brandishing precious metal-backed digital assets like a financial Excalibur.

While Tether and USDC duke it out for fiat dominance, Schiff's audacious play could rewrite the rules of monetary trust. The ultimate irony? A crypto critic now leading the charge for hybridized hard money.

Gold purists are apoplectic. Crypto maximalists are bemused. And Wall Street? Too busy collecting fees on both sides to care.

Schiff Questions Fiat Backing

According to Schiff, it makes no sense to support a token pegged to a currency that can be inflated away. “I get Bitcoin, but not US dollar stablecoins,” he wrote in a social media post.

He pointed out that fiat money can be printed in large amounts, while gold has a fixed supply and centuries of use as money. Schiff said gold cannot be easily devalued by inflation or reckless monetary policies.

I get Bitcoin, but not U.S. dollar stablecoins. If you’re going to introduce a third party custodian, why settle for a token backed by a flawed fiat currency like the dollar, when you can own one backed by gold? You get the same liquidity, but you also get a real store of value.

— Peter Schiff (@PeterSchiff) June 19, 2025

Gold‑Backed Tokens On The Rise

Based on reports, gold‑backed stablecoins are seeing more interest from investors worried about inflation and dollar weakness. Tokens like Tether Gold (XAUT) and Paxos Gold (PAXG) let users move digital claims on physical gold. These assets give the same quick transfers and high liquidity as dollar‑pegged coins but tie each token to real metal stored in vaults.

Regulators across the globe are racing to establish precise regulations for stablecoin reserves. Congress members in the US are considering tighter reserve and audit requirements. Europe and Asia are creating their own regulations to achieve transparency and safeguard users. Schiff’s call for gold introduces additional context to these discussions. It could lead regulators to explore whether commodities can serve as backing for tokens under particular regimes.

According to reports, Schiff’s tweet trended, garnering over 500,000 views within 24 hours. crypto naysayers applauded his observation on fiat risk. Other investors cautioned that gold-backed tokens have higher fees and cumbersome custody expenses. They explained that transferring metal or establishing physical reserves introduces friction when compared with exchanging dollar-backed coins at a bank custodian.

Investors also pointed out that stablecoins are widely used in lending, trading and payments within DeFi platforms. Dollar‑pegged tokens like USDC and USDT dominate these flows because they tie directly into existing banking rails. Gold‑backed coins, by contrast, tend to be held as digital bullion rather than spent on everyday transactions.

Featured image Imagen, chart from TradingView