World Liberty Financial Announces New Stablecoin
World Liberty Financial, a cryptocurrency venture founded by Donald J. Trump and his sons, revealed plans on Tuesday to introduce a new digital currency known as a stablecoin. This move further strengthens Trump’s financial association with the cryptocurrency sector, especially as the current administration is relaxing regulatory scrutiny on the industry. The stablecoin, referred to as USD1, was mentioned in a social media update, though the company did not disclose a launch date. Stablecoins are a favored category of cryptocurrency, designed to maintain a steady value of $1, which makes them practical for various crypto transactions. “No games. No gimmicks. Just real stability,” the company stated on its X account.
Trump’s Expanding Crypto Portfolio
Notably, this stablecoin marks the fourth digital asset that Mr. Trump and his associates have introduced to the market in the past year. World Liberty already has a cryptocurrency called WLFI, which reportedly generated $550 million in sales this month. Mr. Trump’s business entity is set to receive a substantial 75 percent share of these revenues. Additionally, shortly before his inauguration, Trump also launched a memecoin—an informal type of cryptocurrency inspired by internet humor or celebrity culture. Coincidentally, Melania Trump released her own memecoin during the same weekend.
Conflict of Interest in Crypto Ventures
As Mr. Trump actively dives into the crypto landscape, his administration is simultaneously easing regulations on crypto companies. This dual approach raises significant ethical concerns, as experts highlight the profound conflict of interest presented by his efforts to profit from an industry he is responsible for overseeing—an unprecedented situation in U.S. history. The introduction of World Liberty’s stablecoin adds another layer of complexity to this web of business entanglements.
Legislation and Stablecoin Regulations
Congress is currently deliberating on legislation aimed at regulating stablecoins, which could potentially reach Mr. Trump’s desk by the year’s end. In a recent address at a crypto conference, Trump advocated for “simple, common sense rules” governing stablecoins, asserting that they could bolster the prominence of the U.S. dollar. Typically, stablecoins are secured by assets that issuers hold in reserve, allowing users to exchange the digital currency for its cash equivalent whenever needed.
Backing and Strategic Use of the Stablecoin
In the Tuesday announcement, World Liberty indicated that the new stablecoin would be backed by short-term U.S. treasuries, dollar deposits, and other cash equivalents. “We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions,” stated Zach Witkoff, co-founder of World Liberty and son of Steve Witkoff, Mr. Trump’s envoy to the Middle East. The focus on international transactions raises the possibility that foreign entities might utilize this stablecoin to gain favor with Mr. Trump, as noted by Corey Frayer, a former crypto policy advisor at the SEC during the Biden administration.
Trump’s Shift from Skepticism to Advocacy
Previously skeptical of cryptocurrencies, Mr. Trump pivoted to embrace the technology during his campaign last year, vowing to transform the United States into “the crypto capital of the planet.” The cryptocurrency industry invested millions to support Trump and candidates who advocated for crypto-friendly policies. In September, Trump, along with his three sons and the Witkoffs, launched World Liberty, entrusting daily operations to two relatively unknown entrepreneurs, Chase Herro and Zak Folkman, who lack substantial experience in the field.
Future Plans and Crypto Holdings
Initially, World Liberty promised to develop a platform for borrowing and lending digital currencies; however, to date, the company has only released WLFI and the upcoming stablecoin. In recent months, World Liberty has also engaged in an acquisition spree, amassing a collection of cryptocurrencies that includes Ether and lesser-known tokens like SUI and LINK. In a recent panel discussion, Mr. Herro mentioned that the company was forming a “strategic reserve” of these tokens, although he did not clarify the purpose behind this accumulation. This initiative echoes one of Mr. Trump’s past actions in office, which involved creating a U.S. stockpile of Bitcoin, announced through an executive order earlier this month.
