NYDIG's Cipolaro: Tokenizing US Gold Reserves Could Boost Bitcoin
1min read Greg Cipolaro, the global head of research at New York Digital Investment Group (NYDIG), has proposed that tokenizing US gold reserves on a blockchain could potentially benefit Bitcoin. In a March 21 note, Cipolaro highlighted that while blockchain technology offers transparency and auditability, it still relies on trust and coordination with central entities, unlike Bitcoin, which was designed to operate without centralized control.
Cipolaro acknowledged the limitations of blockchains, noting that they are not inherently intelligent and cannot convey complex information such as the price of Bitcoin or the current time. However, he argued that tokenizing gold reserves could enhance transparency and facilitate audits, which could indirectly support the cryptocurrency market. This perspective suggests that while the two assets—Bitcoin and tokenized gold—are fundamentally different, the increased awareness and understanding of blockchain technology could ultimately benefit Bitcoin.
The idea of using blockchain to track US gold reserves and government spending has been floated by officials in the Trump administration, including Elon Musk. This proposal has garnered support from various crypto executives. Cipolaro believes that such initiatives, while not directly competitive with the crypto market, could increase awareness and understanding of blockchain technology. This heightened awareness, in turn, could ultimately benefit Bitcoin by fostering a more informed and engaged public.
The discussion around tokenizing US gold reserves comes amid calls for an independent audit of the country's gold holdings. Republican Senator Rand Paul recently suggested that Musk's federal cost-cutting project should investigate the US government's gold stash at the Bullion Depository in Fort Knox. The US mint reports that Fort Knox holds approximately half of the nation's gold reserves. The Treasury conducts monthly audits and publishes reports on gold holdings at Fort Knox and other locations, but there have been persistent conspiracy theories and calls for an independent audit.
The last time the vaults at Fort Knox were opened was in 2017, when then-Treasury Secretary Steve Mnuchin viewed the gold. Prior to that, the vaults were opened in 1974 for a congressional delegation and a group of journalists. The Mint's website states that no gold has been moved in or out of Fort Knox for many years, except for very small quantities used for purity testing during audits. The current Treasury secretary, Scott Bessent, has confirmed that Fort Knox is audited annually and that all the gold is present and accounted for.
Ask Aime: What impact does tokenizing US gold reserves on blockchain have on the cryptocurrency market, particularly Bitcoin?
