Tokenizing or Tracking US Gold Reserves Will Not Work in the Same Trustless Way as Bitcoin, Says NYDIG Analyst

Greg Cipolaro, global head of research at New York Digital Investment Group (NYDIG), said in a March 21 note that Trump administration officials, including Elon Musk, have floated using a blockchain to track US gold and government spending

An idea to tokenize or track U.S. gold reserves to make their movements transparent on a cryptocurrency blockchain won’t work in the same trustless way as Bitcoin does, but doing so could help the coin, a research analyst says.

Global macroeconomic research head at New York Digital Investment Group (NYDIG) Greg Cipolaro said in a March 21 note that Trump administration officials, and later Elon Musk, have floated using a blockchain to track U.S. gold and government spending — an idea supported by crypto executives.

“Here’s the thing about blockchains. They’re not very smart. They’re limited in the information they convey. For example, Bitcoin has no idea what the price of Bitcoin is or even the current time,” Cipolaro said.

He said the tokenization or tracking of gold reserves on a blockchain could help with audits and transparency but would still "rely on trust and coordination with central entities" compared to Bitcoin, which "was designed to explicitly remove centralized entities."

Cipolaro added that tokenization and blockchain-tracking ideas aren’t competitive with the crypto market and might help to increase awareness of it, which "could ultimately benefit Bitcoin."

It comes amid calls from some for an independent audit of the United States’ gold reserves.

Republican Senator Rand Paul last month seemingly called on Musk’s federal cost-cutting project to investigate the U.S. government’s gold stash at the Bullion Depository in Fort Knox, which the U.S. Mint says holds nearly half of the country’s gold.

The Treasury audits and publishes reports on gold holdings at Fort Knox and other locations across the U.S. every month, but President Donald Trump and Musk have both chatted up decades-old conspiracy theories about the gold and questioned whether it’s still all there.

Is time to audit the Fed, close down the deep state and inspect the gold at Fort Knox.

— Donald J. Trump (@realDonaldTrump) March 16, 2020

They have both pushed for an independent audit of Fort Knox. The vaults were last opened in 2017 for Trump’s then-Treasury Secretary Steve Mnuchin to view the gold and before that, in 1974 to a congressional delegation and a group of journalists.

The Mint’s website says that no gold has went in or out of Fort Knox “for many years,” except for “very small quantities” used to test the gold’s purity during audits.

Trump’s Treasury secretary, Scott Bessent, said last month that Fort Knox is audited every year and “all the gold is present and accounted for.”