Trump Launches USD1 Stablecoin, By Cointribune

The stablecoins are booming, their capitalization is nearing peaks, and Wall Street is crazy about them. Trump, for his part, sees this frenzy as a personal gold mine.

Donald Trump is launching his own stablecoin, named USD1, which will be backed by U.S. public debt and managed by a company, World Liberty Financial (WLFI), that is 60% owned by the Trump family.

The former president's foray into the crypto sphere is no secret. Earlier this year, rumors swirled that Trump was planning to launch his own NFT collection, but those plans never materialized.

Now, a new report by French publication Le Point claims that Trump is gearing up to launch USD1, a stablecoin that will be funded by private investors and managed by WLFI, which is majority-owned by the Trump family.

The report, which cites several sources close to the matter, adds that USD1 will be backed by U.S. public debt, which means that any investment in the stablecoin will be used to purchase tranches of U.S. bonds.

This project is unfolding in the midst of a broader crackdown on crypto firms by the U.S. Securities and Exchange Commission (SEC), with several high-profile cases making headlines recently.

Earlier this week, a judge ruled that the SEC can pursue its case against crypto exchange Binance.

Meanwhile, the agency reached a settlement with crypto entrepreneur Justin Sun, who is investing $75 million of his own money into WLFI to help launch USD1.

However, Sun is also being sued by the SEC in a separate case, and a judge recently granted the agency's request to freeze the remaining funds in his personal bank accounts.

The report by Le Point notes that the USD1 stablecoin will thus open a "high-speed motorway" for foreign financing into the U.S., adding that it remains to be seen how these funds will be used to generate revenue for WLFI and its majority shareholder, the Trump family.

It is worth noting that any foreign entity that buys Trump's stablecoin will ipso facto have an interest in influencing American politics.

"This project is a direct violation of the constitutional safeguards that are meant to protect the integrity of power," specialized lawyer Andrew Rossow is quoted as saying.

Is there anything good about this new presidential initiative? Absolutely not. It is an abuse of power of unprecedented magnitude.

Its purpose is to deceive the American people. Everyone knows that Trump is incompetent in managing anything other than his own hedge fund. But are America's institutions really prepared to see a president juggling public debt and juggling the fates of millions of Americans like a common gambler in a casino?

This stablecoin is not just a crypto story. It is part of a much broader strategy.

The report adds that Trump is planning to introduce a new act, named GENIUS Act, which will focus on regulating stablecoins.

This initiative comes as Congress is currently working on drafting legislation to regulate the crypto industry.

However, Trump's aim is to quickly pass his own legislation, which will allow him to lock down the market while placing his own stablecoin, USD1, in a dominant position.

According to Junaid Dar, a financial analyst, one possible scenario could see stablecoins becoming the main asset class for foreign investors in the U.S., in place of China, which is currently the largest holder of U.S. debt.

But the prospect of siphonning funds from Gulf countries, Hong Kong or Singapore into Trump's stablecoin sparks alarm among some U.S. officials.

A senior administration official, who preferred to remain anonymous, expressed concern over the potential for large-scale interference in the upcoming presidential election.

"It is a totalitarian regime that is being set up in plain sight," said Elizabeth Warren, who is launching an ethical inquiry into the matter.

Heath Mayo, a professor of constitutional law, intervenes: "A president issuing a stablecoin backed by public finances? It is heresy! They will have to pry the 13th Amendment from my cold, dead hands."

Despite the alarm bells ringing, no authority seems capable or willing to stop USD1.

Stablecoins are becoming a pillar of the crypto market. USDC has just passed $60 billion in capitalization, proof that tokenized finance is integrating into the global economy.

But when a president becomes a major player, the boundaries between regulation, personal profit and abuse of power become blurred. If USD1 succeeds, Trump could transform the monetary system… or precipitate one of the biggest financial scandals in history.