Bring a large pot of water to a boil and carefully add the peaches, blanching for exactly 60 seconds—this loosens the skin for easy peeling. Transfer immediately to an ice bath and let sit for 1 minute to stop the cooking process. Once cooled, peel away the skin (it should slip off easily), then pit and slice each peach into 1/2-inch wedges. I find that blanching saves so much time compared to trying to peel raw peaches—it's a small step that makes a huge difference.
Combine the prepared peaches from Step 1, water, and granulated sugar in a large, heavy-bottomed pot. Heat over medium, stirring frequently until the sugar completely dissolves—this takes about 3-5 minutes. Once dissolved, increase heat to bring the mixture to a boil, then immediately reduce to a gentle simmer. Cook for 20 minutes, stirring occasionally, to break down the peaches and begin concentrating the juices. Add the lemon juice and zest along with the ground ginger and vanilla extract, stirring to combine. These aromatics layer in flavor beautifully as the fruit breaks down, rather than waiting until the end.
Using an immersion blender (or carefully transferring to a standard blender in batches), puree the cooked peach mixture until completely smooth. Pour the blended mixture through a fine-mesh strainer back into the pot, pressing gently with the back of a spoon to extract all the smooth puree while catching any fibrous bits or skin fragments. This straining step ensures your butter has that silky, spreadable consistency rather than a chunky texture.
Bring the strained mixture back to a boil over medium-high heat, then reduce to a low simmer. Cook uncovered for 30-40 minutes, stirring frequently (every 3-4 minutes) to prevent sticking and scorching on the bottom. The butter is ready when it has thickened considerably, mounds slightly on a spoon, and a wooden spoon drawn across the bottom leaves a trail that slowly fills back in. I like to use a wooden spoon for this step because it won't scratch your pot and you can really feel the thickness changing as you stir.
Carefully ladle the hot peach butter into sterilized jars, leaving about 1/4 inch of headspace at the top. Allow the jars to cool to room temperature on your counter—this typically takes 1-2 hours. Once cooled, the butter will continue to thicken slightly as it sets, reaching its final spreadable consistency.