- President Trump’s company, World Liberty Financial, has released a new stablecoin USD1, pegged to the US dollar.
- USD1, launched on Ethereum and BNB Chain, to compete against USDT and USDC
- Ethical concerns: The Trump family’s involvement is already drawing scrutiny regarding potential conflicts of interest
President Donald Trump has expanded his involvement in the cryptocurrency world with the launch of a new stablecoin.
His venture, World Liberty Financial, has introduced USD1, a digital token designed to maintain a one-to-one peg with the U.S. dollar. This stability is achieved through backing by cash reserves, U.S. Treasury bills, and dollar deposits.
Unlike more volatile cryptocurrencies such as Bitcoin or Ethereum, USD1 aims to offer a stable value, making it an attractive option for crypto traders looking to avoid significant market fluctuations.
How Does USD1 Stack Up Against Competitors?
USD1 quietly launched on March 4, operating on both the Ethereum and BNB Chain blockchains. It currently has a circulating supply of over $3.5 million.
While the token is not yet available for trading, it is positioned to become a competitor to industry giants like Tether’s USDT and Circle’s USDC. These two established stablecoins currently dominate the market, holding a combined market value that has peaked at $200 billion.
The Trump family’s foray into stablecoins is likely driven by their significant profit potential. Companies like Tether and Circle generate billions of dollars annually by investing the user deposits that back their stablecoins into interest-bearing U.S. Treasuries.
Although users themselves do not earn interest on their held stablecoins, the issuing companies benefit greatly from these treasury yields, which can sometimes approach 5%.
Related: Ethereum, Tron Lead Trump’s World Liberty Financial Altcoin Buying Spree
The Broader Ambitions of World Liberty Financial
World Liberty Financial, which was first announced in August 2024, is presented as a future hub for decentralized finance (DeFi).
The platform has outlined plans to offer services such as cryptocurrency lending, trading, and governance, all facilitated through its native token, $WLFI.
While specific details about these services are still limited, the project has garnered considerable investor interest. Notably, it raised $550 million through token sales, attracting high-profile buyers including crypto entrepreneur Justin Sun.
Ethical Questions Surrounding the Trump Family’s Involvement
The extensive involvement of the Trump family in this venture has already sparked serious ethical concerns.
Donald Trump holds the self-proclaimed title of “Chief Crypto Advocate” within the company, while his sons Eric and Donald Jr., along with his son Barron, are listed as Web3 Ambassadors. Reports also indicate that the Trump family controls a substantial 60% of the platform’s equity.
Regulatory Scrutiny Intensifies
This venture has since been facing increasing scrutiny from ethics experts and policymakers.
With Trump back in office and wielding control over regulatory appointments, questions are being raised about whether crypto backers with ties to the administration are receiving preferential treatment.
For instance, the Securities and Exchange Commission (SEC) recently paused its legal action against Justin Sun shortly after Trump’s inauguration, citing the “possibility of a resolution.”
Related: Trump World Liberty Invests $250K in ONDO Tokens, RWA Focus Grows
Meanwhile, Congress is actively working on the GENIUS Act, a bipartisan bill aimed at establishing a regulatory framework for stablecoins. This bill has successfully passed through the Senate Banking Committee and could soon be presented to the President for his signature.
Trump’s direct involvement in a stablecoin venture while simultaneously overseeing the regulation of the same industry has significantly amplified concerns about potential conflicts of interest.
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