Trump-Backed World Liberty Launches USD1 Stablecoin After $5.5B Token Sale

World Liberty Financial, a cryptocurrency enterprise backed by former U.S. President Donald Trump, announced on Tuesday that it will launch a stablecoin pegged to the U.S. dollar. This move comes after the company successfully raised over $5 billion through the sale of an independent digital token.

The stablecoin, named USD1, will be fully backed by U.S. Treasury bonds, U.S. dollars, and other cash equivalents, and will be traded at a 1:1 ratio with the U.S. dollar. This development is significant as stablecoins like Tether and USDC, which are also pegged to the U.S. dollar, have seen rapid growth in recent years and have become a crucial component in the multi-trillion-dollar cryptocurrency trading industry. These stablecoins facilitate the flow of funds between different cryptocurrencies or their conversion into traditional cash.

World Liberty's co-founder, Zach Witkoff, stated that sovereign investors and major institutions will be able to incorporate USD1 into their strategies, enabling seamless and secure cross-border transactions. World Liberty was established two months before Trump's victory in the U.S. presidential election, with Trump, his three sons, and real estate developer Steve Witkoff (Zach's father and Trump's Middle East envoy) as key figures.

During his campaign, Trump pledged to become the "crypto president," promising to overhaul U.S. regulations on cryptocurrencies and reverse the policies of his predecessor, Joe Biden, which had been seen as hostile to the industry. Trump's cryptocurrency ventures, including the launch of a so-called meme coin in January, have drawn criticism from government ethics experts and political opponents due to potential conflicts of interest.

World Liberty aims to provide financial services without the need for intermediaries like banks. The company recently announced that it had raised $5.5 billion through the sale of its cryptocurrency, WLFI. Kevin Lehtinity, CEO of the New York-based payment infrastructure company Borderless, noted that USD1 will face stiff competition from existing companies like Tether and Circle, the issuer of USDC. He questioned whether Trump's involvement would lead to cooperation or competition with other U.S. enterprises.

World Liberty has stated that the reserves for USD1 will be managed by BitGo, a company based in California. BitGo's institutional brokerage services will support USD1 by providing deep liquidity and trading for institutional clients. This move by World Liberty Financial underscores the growing interest and investment in stablecoins, which are seen as a bridge between traditional finance and the cryptocurrency world.