In a surprising shift that’s reverberating across the financial and crypto communities, long-time Bitcoin skeptic Peter Schiff has softened his stance on digital assets. Known for his staunch advocacy of gold and fierce criticism of cryptocurrencies—once even calling Bitcoin a threat to U.S. economic security—Schiff now says he “gets” Bitcoin in 2025. However, his newfound understanding comes with a caveat: he remains deeply skeptical of USD-backed stablecoins, questioning their foundation on what he calls a "flawed fiat currency."
This evolution in perspective reflects broader market dynamics, where institutional adoption of Bitcoin is accelerating and regulatory frameworks are beginning to take shape. Schiff’s comments also coincide with the recent passage of the GENIUS Act by the U.S. Senate—the first major legislative step toward regulating stablecoins in the United States.
A Long-Standing Skeptic Reconsiders
Peter Schiff, Chief Economist at Euro Pacific Capital and a well-known figure in the gold investment world, has spent over a decade warning investors against Bitcoin. He argued that Bitcoin lacked intrinsic value, was too volatile for practical use, and posed systemic risks due to its decentralized nature.
But times are changing.
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With companies like MicroStrategy, Tesla, and increasingly firms in Japan and Europe adding Bitcoin to their balance sheets as a treasury reserve asset, the narrative around Bitcoin’s utility has shifted. Schiff acknowledges this transformation, stating on CryptoTwitter (CT) that he now understands the appeal and function of Bitcoin—even if he still favors gold as the ultimate store of value.
His revised view doesn’t extend to stablecoins, particularly those pegged to the U.S. dollar. In a pointed critique, Schiff asked: Why would anyone trust a digital token backed by a currency that’s subject to inflation, debt expansion, and central bank manipulation?
The Problem With Dollar-Pegged Stablecoins
Stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to an external asset—most commonly the U.S. dollar. They play a crucial role in the crypto ecosystem, enabling fast transfers, hedging against volatility, and facilitating trading across platforms.
However, Schiff argues that anchoring digital assets to a fiat currency undermines the entire premise of decentralization and financial sovereignty. The U.S. dollar, he notes, is not immune to devaluation through monetary policy or fiscal mismanagement.
Instead of relying on USD-backed tokens like Tether (USDT) or USD Coin (USDC), Schiff proposes an alternative: a gold-backed stablecoin.
He envisions a digital asset fully backed by physical gold reserves—offering both price stability and protection against inflation. One CT user humorously suggested naming it “SchiffCoin,” a moniker that quickly gained traction in online forums.
While the idea isn’t new, it highlights a growing debate about what should underpin trustless financial systems: government-issued currencies or hard assets like precious metals.
Gold-Backed Stablecoins: Niche But Growing
Despite growing interest, gold-backed stablecoins remain a small segment of the overall market.
According to CoinGecko data:
- The total stablecoin market cap stands at $261 billion.
- Gold-backed stablecoins account for just $2 billion, or less than 1% of the total.
The largest player in this space is PAX Gold (PAXG), which represents ownership of one fine troy ounce of physical gold stored in secure vaults. PAXG has a market cap of $870 million and a 24-hour trading volume of $207 million.
Compare that to Tether (USDT), the dominant USD-pegged stablecoin:
- Market cap: $155.9 billion
- Daily trading volume: $69 billion
These figures underscore the dominance of dollar-pegged tokens in global crypto markets. Their widespread use in trading, remittances, and decentralized finance (DeFi) applications makes them indispensable for now.
Yet Schiff believes this reliance on fiat-backed instruments creates fragility. If confidence in the dollar erodes—due to inflation, geopolitical instability, or monetary policy failure—the entire stablecoin ecosystem could face a crisis of trust.
Regulatory Shifts: The GENIUS Act and Market Confidence
Schiff’s comments come shortly after the U.S. Senate passed the GENIUS Act (Generating Engagement for National Innovation Using Stablecoins)—a landmark bill aimed at establishing a federal framework for issuing and regulating stablecoins.
The legislation requires issuers to maintain sufficient reserves, undergo regular audits, and comply with anti-money laundering (AML) standards. It stops short of classifying stablecoins as securities but sets clear guidelines for transparency and consumer protection.
Not all market participants share Schiff’s skepticism. Michael Novogratz, CEO of Galaxy Digital, welcomed the bill as a positive step toward legitimizing digital assets in traditional finance.
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He believes the GENIUS Act will “open the floodgates” for Wall Street institutions to enter the crypto space more confidently, bringing capital, infrastructure, and credibility.
For Schiff, however, regulation doesn’t solve the fundamental issue: tying digital innovation to a flawed monetary system.
Frequently Asked Questions (FAQ)
Q: Why is Peter Schiff now saying he 'gets' Bitcoin?
A: Schiff acknowledges Bitcoin’s growing adoption by corporations and institutions as a reserve asset. While he still prefers gold, he recognizes Bitcoin’s role as a decentralized store of value immune to government interference.
Q: What are gold-backed stablecoins?
A: These are digital tokens backed 1:1 by physical gold holdings. Each token represents ownership of a specific amount of gold stored in secure vaults, combining blockchain efficiency with tangible asset backing.
Q: Are USD stablecoins safe?
A: Most major USD-pegged stablecoins like USDT and USDC claim full reserve backing and undergo third-party audits. However, concerns remain about transparency, counterparty risk, and exposure to fiat currency depreciation.
Q: Could a gold-backed stablecoin really compete with USDT or USDC?
A: Currently, no—due to lower liquidity and limited adoption. But in environments with high inflation or currency instability, gold-backed options may gain traction as alternatives.
Q: What impact does the GENIUS Act have on crypto investors?
A: It increases regulatory clarity and investor protection for stablecoin users. This could boost mainstream adoption while reducing systemic risks associated with unregulated issuers.
Q: Is Schiff planning to launch his own stablecoin?
A: As of now, there’s no official confirmation. His remarks appear conceptual, highlighting flaws in current models rather than announcing a product launch.
Looking Ahead: A New Chapter for Digital Assets?
Peter Schiff’s pivot on Bitcoin marks a symbolic moment in the maturation of the cryptocurrency market. When even longtime critics begin to recognize its utility, it signals broader acceptance beyond speculative circles.
However, his dismissal of USD-backed stablecoins raises valid questions about long-term sustainability and trust in hybrid financial systems—digital tokens anchored to analog monetary policies.
As innovation continues and regulation evolves, solutions like commodity-backed digital assets, decentralized identity, and on-chain compliance tools may bridge the gap between traditional finance and Web3 ideals.
Whether or not “SchiffCoin” ever launches, his critique serves as a reminder: true financial resilience may require more than just digitizing existing systems—it demands rethinking their foundations altogether.
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