Senators Elizabeth Warren and Four Other Democratic Senators Express Concern Over USD1 Stablecoin

Massachusetts Senator Elizabeth Warren and four other Democratic senators have expressed concern over potential conflicts of interest

Massachusetts Senator Elizabeth Warren and four other Democratic senators have raised concerns over potential conflicts of interest arising from a stablecoin released by World Liberty Financial (WLFI), a cryptocurrency company, which is linked to the U.S. President Donald Trump’s family.

In a letter to several key regulatory officials, seen by Blockworks on Monday, the senators asked what several agencies plan to do about these concerns as lawmakers seek to move forward with stablecoin legislation.

The stablecoin, USD1, is backed by WLFI, which President Trump and his family have major stakes in. The Trump family involvement creates a potential conflict of interest that could pose serious risks to the nation’s financial system.’ The letter was signed by five Democratic lawmakers in the U.S. Senate

It was addressed to Michelle Bowman, the chair of the Federal Reserve’s supervision and regulation committee, and Rodney Hood, the acting Comptroller of the Currency. The lawmakers specifically inquired how the agencies plan to regulate WLFI and its newly launched USD1 stablecoin.

The letter comes as members of Congress are considering legislation to regulate stablecoins through the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act. If signed into law, the bill would essentially allow the Office of the Comptroller of the Currency (OCC) and Federal Reserve to oversee stablecoin regulation, including for issuers like WLFI and its USD1 coin.

The senators argue that the rollout of a stablecoin overseen by a sitting president poses exceptional risks. “President Trump’s involvement in this venture, as he strips financial regulators of their independence and Congress simultaneously considers stablecoin legislation, presents an extraordinary conflict of interest that could create unprecedented risks to our financial system,” the letter states.

Lawmakers warn of Trump’s financial ties influencing stablecoin regulation

The senators are concerned about potential conflicts between Trump’s financial interests and the regulatory decisions that will be made by agencies such as the Federal Reserve and the Office of the Comptroller of the Currency (OCC). The financial ties raise the question, the letter states, of whether financial regulators will be making decisions influenced by whether the Trump family — which owns 60% of WLFI’s equity — will benefit.

Furthermore, Trump’s executive order in February 2024 has been noted to make the fears worse. The order put federal agencies — including the OCC — on notice to regularly consult the White House on their priorities, potentially handing the president excessive leeway over financial regulation. Such an arrangement, the senators say, also aggravates the existing conflict of interest surrounding the stablecoin.

The USD1 stablecoin offered by WLFI saw its launch in late March 2025 and is seen as a direct competitor in the fast-growing digital currency space. Launched on major blockchain platforms, including Ethereum and BNB Chain, details about the company alongside its project have been largely mysterious, fostering additional scepticism among critics.

WLFI’s $550M token sales and Trump family ties spark regulatory and ethical concerns

Since its launch in September 2024, WLFI has completed two public token sales, raising a total of $550 million. The project has attracted interest for its political connections, with Donald Trump Jr. pitching the stablecoin at the DC Blockchain Summit in March 2025 and playing a role in the push for the coin. The Trump family owns a majority stake in the company.

The senators say they are concerned about the potential risks stablecoins pose to the financial system. Still, they also ask for stronger regulatory action in the face of an increasingly widening debate in Congress over the regulation of stablecoins.

If instituted, the GENIUS Act would put the OCC and the Federal Reserve at the nexus of regulating stablecoin companies like WLFI to ensure they are held to sophisticated financial standards.

President Trump’s February 2024 executive order directing federal agencies to consult with White House officials regularly is facing heightened scrutiny in light of the launch of USD1. This order, which gives the president influence over financial regulators like the OCC and the Federal Reserve, is seen by critics as increasing the potential for conflicts of interest, especially as Trump’s family has major stakes in WLFI.

Meanwhile, Congress is advancing the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), which is another attempt to regulate the risk posed by stablecoins as lawmakers throughout Congress move to address their unregulated aspects.

The legislation aims to provide a consistent regulatory framework for stablecoins, granting the OCC and the Federal Reserve the authority to regulate the digital asset ecosystem. If passed, the legislation would impose strict regulatory standards on stablecoin issuers such as WLFI, increasing transparency and accountability in the sector.