World Liberty Financial Launches USD1 Stablecoin Backed by Trump

World Liberty Financial (WLFI), a decentralized finance protocol backed by former U.S. President Donald Trump and his family, has officially announced its plans to launch a U.S. dollar-backed stablecoin named USD1. This stablecoin will be anchored to the value of one U.S. dollar and will be fully backed by short-term U.S. government securities, U.S. dollar deposits, and other cash equivalents. The reserves for USD1 will be custodied by BitGo, while BitGo Prime, the firm's brokerage service, will provide liquidity for the token.

The USD1 stablecoin will initially be available on the Ethereum and BNB Chain networks, with plans to expand to other blockchain networks in the future. This announcement follows observations of test transactions involving a token named World Liberty Financial USD (USD1) on Ethereum and BNB Chain, with BitGo and market maker Wintermute involved in the transfers.

Zach Witkoff, co-founder of WLFI, highlighted the unique advantages of USD1, stating, "USD1 provides what algorithmic and anonymous crypto projects cannot—access to the power of DeFi underpinned by the credibility and safeguards of the most respected names in traditional finance. We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions."

WLFI, led by Zachary Folkman and Chase Herro, gained significant attention last year as one of the first crypto projects to receive backing from Trump. The protocol aims to create a blockchain-based marketplace where users can borrow and lend cryptocurrencies, create liquidity pools, and transact with stablecoins. The launch of USD1 is part of WLFI's broader strategy to enter the decentralized finance (DeFi) space, focusing on recreating traditional banking services on blockchain networks.

The stablecoin is designed to be redeemable 1:1 for the U.S. dollar, ensuring stability and reliability for users. This move comes as discussions in Washington regarding stablecoin regulation continue. The GENIUS Act, which aims to establish a regulatory framework for U.S. stablecoins, has moved out of the Senate Banking Committee and is expected to reach a full floor vote soon. This regulatory push suggests that the administration is working to create a favorable environment for its own crypto ventures, including USD1.

World Liberty Financial has already conducted two public token sales for its governance token, $WLFI, raising a combined $550 million from investors. The Trump family maintains control of 60% of the company’s equity interests, with key players including the president’s sons—Barron, Eric, and Donald Jr.—serving as “Web3 Ambassadors” for the platform. Other notable figures involved in the venture include Trump loyalist and real estate magnate Steve Witkoff and his sons Alex and Zach, as well as DeFi developers Zak Folkman and Chase Herro.

The launch of USD1 has sparked both excitement and ethical concerns. Critics have raised questions about potential conflicts of interest, given the president’s involvement in cryptocurrency projects. The case of Tron founder Justin Sun, who announced a $30 million investment in World Liberty shortly after Trump won the 2024 election, has added to these concerns. Following Trump’s inauguration and the appointment of Mark Uyeda as acting chair of the SEC, enforcement actions against Sun and other crypto executives who backed Trump have been dropped, fueling speculation about preferential treatment.

Despite these controversies, the stablecoin market continues to grow, driven by institutional demand and the push for U.S. dollar-backed stablecoin adoption. The launch of USD1 by World Liberty Financial is a strategic move that aligns with the broader trend of stablecoin adoption and regulation. As the market evolves, it will be interesting to see how USD1 performs and how the regulatory landscape shapes the future of stablecoins.