Trump’s USD1 Play: A Move Towards Dollar Expansion Rather Than Blockchain Enthusiasm, Says Ari10 CEO
By Jayson Derrick
March 26, 2025
In a significant development within the cryptocurrency space, President Donald Trump’s endorsement of stablecoins, specifically the newly launched USD1, is drawing scrutiny from industry experts. According to Mateusz Kara, CEO of the European crypto payments company Ari10, this initiative signals a strategic shift towards dollar expansion rather than a genuine interest in blockchain technology.
Understanding USD1: The New Stablecoin
The USD1 stablecoin, which was introduced by the Trump family-affiliated decentralized finance venture World Liberty Financial on March 25, claims to be backed 1:1 by U.S. treasuries, cash equivalents, and deposits. It will operate on the Ethereum and Binance Smart Chain networks and has attracted over $500 million in funding along with 85,000 verified users, as reported by CNBC.
While the introduction of USD1 may seem like a progressive step towards the mainstream adoption of cryptocurrency, Kara emphasizes that the underlying motives extend beyond mere blockchain fascination. “I don’t quite believe in Trump’s sudden love for stablecoin and blockchain,” he remarked. Instead, he proposes that the stablecoin’s primary aim is to establish a U.S.-led strategy to reshape the dynamics of global debt markets.
The Mechanism Behind Dollar Expansion
Kara elucidates the mechanics that come into play with the launch of USD1. Issuing stablecoins like USD1 necessitates the purchase of U.S. dollars and short-term treasuries. This interaction creates a decentralized channel for distributing U.S. bonds, ultimately enhancing the appeal of U.S. debt. “It’s a new dollar expansion mechanism,” he stated, suggesting that this could enable the United States to borrow at reduced costs by amplifying demand for its financial instruments.
Competition in the Stablecoin Market
USD1 enters an already saturated stablecoin environment, where prominent players like Tether, Circle, PayPal, and Ripple are vying for dominance. Remarkably, the stablecoin market has seen over a 46% growth in the past year. Treasury Secretary Scott Bessent has acknowledged stablecoins as crucial for maintaining the United States’ status as the dominant reserve currency.
Ramifications for European Markets
Kara warns that the launch of USD1 serves as a crucial signal for European markets. He argues that if Europe fails to fortify its euro-based stablecoin infrastructure, it risks becoming overshadowed by dollar-centric solutions. “Europe must strengthen its euro-based stablecoin infrastructure. Otherwise, dollar-based stablecoins will dominate the digital financial system,” he cautioned.
Additionally, Kara advocates for regulatory advancements, citing the European Union’s MiCA framework as essential for fostering a safer and more competitive environment for stablecoin innovation. He believes that the recent spate of hacks and scandals within the cryptocurrency space has shaken investor confidence and that establishing regulatory measures could restore trust and transparency.
The Broader Implications of USD1
While some may view USD1 as a technological advancement in the crypto space, Kara posits that it is more about exercising soft power. By incorporating dollar-backed stablecoins into the global financial framework, the U.S. might devise a new means of managing its debt, circumventing traditional banking methods and expanding the dollar’s influence in a programmable and borderless context.
As Kara concludes, the trajectory of stablecoins is evolving beyond mere digital currency discussions. “Stablecoins are no longer just about crypto,” he insisted. “They are becoming tools of global monetary strategy.”
This assertion raises critical questions about the future of financial systems worldwide and the implications of adopting stablecoins within traditional economic frameworks. How Europe responds to this challenge will likely determine its standing in the global financial landscape in the years to come.
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