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.

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 attained through backing by cash reserves, U.S. Treasury bills, and dollar deposits. Unlike more volatile cryptocurrencies like Bitcoin or Ethereum, USD1 aims to offer a constant value.

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 poised to become a competitor to industry giants like Tether’s USDT and Circle’s USDC. These two established stablecoins currently dominate the market, with 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. However, users themselves do not earn interest on their held stablecoins, but the issuing companies benefit greatly from these treasury yields, which can sometimes reach up to 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, is being built as a future hub for decentralized finance (DeFi). The platform has plans to offer services such as cryptocurrency lending, trading, and governance, all facilitated through its native token, $WLFI. While details about these services are still limited, the project has already attracted significant investor interest. It has reportedly raised $550 million through token sales, with buyers including crypto entrepreneur Justin Sun.

Ethical Issues Surrounding the Trump Family’s Involvement

The involvement of the Trump family in this venture has already raised serious ethical concerns. Donald Trump is named as the “Chief Crypto Advocate” at the company, while his sons Eric and Donald Jr., along with his son Barron, are listed as Web3 Ambassadors. Reports also state that the Trump family controls a hefty 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 making key appointments to regulatory bodies, questions are arising about whether crypto backers with ties to the administration might receive special treatment. For instance, the Securities and Exchange Commission (SEC) recently paused its case against Justin Sun shortly after Trump’s inauguration, citing the “possibility of a new settlement.”

Meanwhile, Congress is working on the GENIUS Act, a bipartisan bill to regulate stablecoins, which has now passed the Senate Banking Committee and could soon reach the President for his signature.

Trump’s direct involvement in a stablecoin venture while also overseeing the regulation of the same industry is raising further concerns about potential conflicts of interest.

The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.