USD1 Stablecoin Launch by World Liberty Financial (WLFI), Linked to President Donald Trump's Family, Raises Concerns in Congress

The launch of USD1, a U.S. dollar-pegged stablecoin by World Liberty Financial (WLFI), a cryptocurrency platform linked to President Donald Trump's family, is raising concerns in Congress.

World Liberty Financial (WLFI), a cryptocurrency platform founded by Donald Trump’s daughter, Tiffany Trump, and son-in-law, Michael Maroun, has launched a USD1, a U.S. dollar-pegged stablecoin.

The launch of the stablecoin, first announced in March, comes as members of Congress are working on legislation for the coins, and some fear it could complicate bipartisan efforts to pass the bills.

While some see the launch of the stablecoin as a positive move for cryptocurrency adoption in the U.S., others are apprehensive about potential conflicts of interest due to Trump’s family members’ involvement in the project.

Earlier this year, Democrats, including Senator Elizabeth Warren, expressed their criticisms of the project.

“Donald Trump’s family is launching a grift to fleece Americans with a new cryptocurrency as part of a broader effort to enrich themselves at the expense of the country,” said one Democrat, summarizing the collective opinion.

“It is no coincidence that this grift is unfolding at the same time that Congress is considering new legislation that would benefit the issuers of stablecoins.”

Those critical of the project suggest that any bills that benefit issuers of stablecoins could be seen to financially benefit Trump’s family, and they fear that the prospect of such bills being passed may be seen to align the legislation with Trump’s interests. This, they add, could lead to efforts to delay the bills or to pass them with stricter regulations on the stablecoin market.

At the same time, they say, the characteristics of USD1 align closely with key elements in the current proposed legislation.

However, Trump’s increasing involvement in the cryptocurrency sector, which ranges from meme coins to NFTs and Bitcoin (BTC) mining, is creating additional challenges for lawmakers.

“We’re trying to get financial innovation legislation passed, but it’s getting harder with Donald Trump’s new initiatives,” said Republican Rep. French Hill, a member of the House Financial Services Committee, which is currently drafting the legislation for cryptocurrencies.

“His activities, especially related to stablecoins, are making it more difficult to cut through the noise and pass legislation that will meaningfully benefit the industry and investors.”

As a result, some critics are apprehensive that the growing political entanglement could delay efforts to pass the bills.

At the same time, there is bipartisan support for both stablecoin bills, with the GENIUS Act (which stands for "Generating Economic New Income and Solutions," and is sponsored by Senators Bill Hagerty and John Kennedy) advancing through the Senate and the STABLE Act (which stands for "Stablecoin Transparency and Bank Engagement," and is sponsored by Rep. Ann 'AnnMarie' DeCiccio and French Hill) expected to be voted on by the House Financial Services Committee soon.

Both bills aim to offer clarity for the rapidly growing market in the U.S. for stablecoins, which are pegged to the value of another asset—in this case, the dollar—and are used by cryptocurrency traders to carry out trades. However, the bills differ on how foreign issuers of stablecoins, such as Tether, should be regulated.

"The STABLE and GENIUS Acts are about 80% similar, but there are still some key differences that need to be reconciled before we can move forward with final approval," said Rep. Bryan Steil, chair of the House panel on digital assets.

Despite the concerns raised by some over Trump’s involvement in cryptocurrency and the potential conflicts of interest it poses, the House Financial Services Committee is making significant progress on the stablecoin bills.

As the bills move closer to final approval, the focus will shift to striking a balance between crypto innovation and regulatory oversight in the U.S.