Donald Trump’s World Liberty Financial Unveils New Stablecoin, USD1
By Tom Wilson and Elizabeth Howcroft, Reuters
LONDON – Donald Trump’s venture into the cryptocurrency sector, World Liberty Financial, has announced plans to launch a new dollar-pegged stablecoin called USD1. This announcement comes on the heels of the company successfully raising $550 million from the sale of a separate digital token, known as $WLFI.
According to a statement released by World Liberty, USD1 will be fully backed by U.S. Treasuries and cash equivalents, ensuring that its value remains stable at $1. This new stablecoin is designed to serve as a viable option in a market that has seen significant growth in recent years, with stablecoins now totaling over $237 billion in circulation, according to data provider CoinGecko. Major players in this market, such as Tether and USDC, have significantly contributed to the multi-trillion dollar cryptocurrency trading industry, acting as essential facilitators for moving funds between different cryptocurrencies and into conventional cash.
Strategic Vision for Stablecoin Integration
Zach Witkoff, the co-founder of World Liberty Financial and son of real estate businessman Steve Witkoff, expressed ambition for USD1 to be adopted by "sovereign investors and major institutions" seeking secure and efficient cross-border transactions. Witkoff emphasized that the stablecoin would have its reserves managed under strict oversight, with regular audits conducted by an unspecified third-party accounting firm.
The initiative follows Trump’s previous commitment to be a "crypto president," pledging to reform U.S. regulations on cryptocurrencies and reverse measures implemented during the Biden administration that were perceived as restrictive. Despite this, the president’s crypto ambitions have drawn scrutiny from ethics experts and political opponents, who raise concerns over potential conflicts of interest amid his financial ventures in the digital currency space.
Competition and Market Dynamics
While World Liberty Financial aims to make a substantial entry into the competitive stablecoin market, payment industry experts have pointed out the formidable challenge posed by established players like Tether and the U.S.-based Circle, which issues USDC. Kevin Lehtiniitty, CEO of Borderless.xyz, noted that although launching a stablecoin may appear straightforward, the real challenge lies in building a comprehensive ecosystem that encourages its adoption.
To supplement the launch of USD1, World Liberty Financial reported that its reserves will be held in custody by BitGo, a California-based prime brokerage firm, which will provide institutional clients with necessary liquidity and trading capabilities.
World Liberty plans to utilize Ethereum and Binance Smart Chain for USD1’s initial launch, with intentions to expand to additional blockchains in the future, thereby broadening its reach within the cryptocurrency landscape.
Regulatory Environment and Challenges
The partnership with Binance, the world’s largest cryptocurrency exchange, comes in light of the platform’s contentious history. Binance’s founder was sentenced last year for violations pertaining to U.S. money laundering laws, and the exchange has faced considerable fines after being implicated in facilitating suspicious transactions. As the landscape for cryptocurrency continues to evolve, both World Liberty and other stakeholders will need to navigate a complex regulatory environment while striving for compliance and public trust.
As this venture unfolds, the implications for the broader cryptocurrency market and Trump’s political future remain a point of keen interest among investors and analysts alike.
Reporting by Tom Wilson and Elizabeth Howcroft; Editing by Louise Heavens and Joe Bavier. For more information on the Reuters Trust Principles, visit our website.
Share this article:
