Trump Family's New Crypto Move: Can USD1 Stablecoin Shake Up the Market?
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Trump Family's New Crypto Move: Can USD1 Stablecoin Shake Up the Market?
USD1 entry brings new variables to the crypto market.
Navigating Web3 tides with focused insightsBy Joyce
On March 25, 2025, the Trump family made a high-profile entrance into the crypto market by launching USD1, a dollar-pegged stablecoin through World Liberty Financial (WLFI), sparking intense debate across the industry.
Donald Trump, the current U.S. president who once doubted cryptocurrencies, has transformed into an outspoken advocate—and now, he’s taking direct action alongside his family. USD1 is not merely a commercial venture for the Trumps; it's widely seen as a strategic move to leverage political influence and reshape the crypto landscape.
The stablecoin market is already dominated by giants—Tether (USDT) and Circle (USDC) control nearly 90% of the space. Why is the Trump family entering now? Can USD1 disrupt the existing order? And more importantly, what ripple effects might this politically backed stablecoin trigger?
USD1: The Trump Family’s Stablecoin Vision
USD1 is a dollar-pegged stablecoin launched by the Trump family via World Liberty Financial (WLFI), aiming to provide institutional and sovereign investors with a “secure, compliant, and transparent” digital dollar instrument.
According to WLFI’s official statement, USD1 will be fully backed by short-term U.S. Treasury bonds, dollar deposits, and other cash equivalents, ensuring each USD1 token can be redeemed 1:1 for one U.S. dollar. This structure mirrors leading dollar-pegged stablecoins like USDT and USDC. However, WLFI emphasizes its “institution-grade” compliance and transparency to attract large-scale investors.
Key aspects of USD1’s operational model include:
Asset Backing and Custody:
USD1’s reserve assets will be held by BitGo, a California-based crypto custodian. In addition to secure storage, BitGo will offer deep liquidity and trading support through its Prime brokerage services. WLFI states that reserves will undergo regular audits by a third-party accounting firm to ensure transparency. As of March 25, 2025, however, WLFI has not disclosed which accounting firm will conduct these audits.
Blockchain Support:
USD1 will initially launch on Ethereum and Binance Smart Chain, with plans to expand to other blockchain networks in the future. This choice reflects WLFI’s alignment with major public chains. Ethereum remains central to the DeFi ecosystem, while BSC holds significant market share due to its low fees and high throughput. According to Etherscan and BscScan data, USD1’s smart contracts were deployed in early March 2025, with a total supply exceeding $3.5 million, though trading has not yet gone live.
Target Users:
WLFI explicitly states that USD1 is not intended for retail investors but rather designed for institutions and sovereign entities. Zach Witkoff, co-founder of WLFI, said: “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.” This positioning signals the Trump family’s ambition to penetrate institutional markets and challenge incumbent stablecoins in cross-border payments and DeFi applications.
Integration with Traditional Finance:
USD1 is built around bridging traditional finance with blockchain innovation. Witkoff noted that USD1 offers advantages that algorithmic stablecoins and anonymous DeFi projects cannot—“access to the power of DeFi, backed by the most respected brands in traditional finance.” WLFI also plans partnerships with DeFi platforms such as Sui, Ondo Finance, Chainlink, and Aave to further integrate blockchain finance with conventional financial systems.
Notably, USD1 isn’t the Trump family’s first foray into crypto. In October 2024, WLFI launched another token, WLFI, raising $550 million through two public token sales, with entities linked to the Trump family receiving 75% of the proceeds.
In addition, both Donald Trump and First Lady Melania launched their own memecoins before inauguration. Trump’s $TRUMP token, launched on January 17, 2025, briefly surged to a market cap of $14 billion, only to later plunge over 80%.
Stablecoins Amid America’s Regulatory Storm
As a cornerstone of the crypto economy, stablecoins have drawn increasing regulatory scrutiny in the U.S. The Trump administration’s pro-crypto stance has opened new opportunities—but also brought fresh challenges. USD1’s launch unfolds precisely within this complex environment.
The Trump Administration’s Pro-Crypto Policies:
During his campaign, Trump pledged to make America the “crypto capital of the world,” and swiftly followed through after taking office with a series of supportive measures.
In January 2025, Trump signed an executive order promoting the growth of the U.S. crypto sector, including a proposal to establish a national crypto reserve. By early March, he announced plans to create a U.S. strategic crypto reserve comprising Bitcoin, Ethereum, XRP, Solana, and Cardano.
These pre-inauguration promises fueled a bull run: Bitcoin surpassed $107,000 by the end of 2024, nearly doubling from pre-campaign levels.
Progress on Stablecoin Legislation:
In March 2025, Congress was reviewing the *Guidance and Establishment of National Innovation in Stablecoins Act*. The bill passed the Senate Banking Committee on March 13 and could be submitted to President Trump for signing by June. It aims to create a new regulatory framework for stablecoin issuers, granting them rights similar to traditional banks.
This legislative momentum is a clear advantage for USD1. As a project tied to the Trump family, USD1 may receive preferential treatment in regulatory approvals and market access. However, this raises concerns about potential conflicts of interest. With the Trump family directly involved in a crypto venture while the administration advances favorable policies, critics—including government ethics experts and political opponents—have accused the administration of being both referee and player.
Regulatory Challenges and Market Competition:
Despite policy tailwinds, USD1 faces significant hurdles.
First, competition in the stablecoin market is fierce. Tether (USDT) and Circle (USDC) dominate the space, with market shares far ahead of any newcomer. In January 2025, the total market cap of stablecoins exceeded $200 billion, and active wallets for USDT and USDC grew more than 50% year-on-year. In contrast, USD1, as a late entrant, will struggle to build trust and cultivate an ecosystem quickly.
Second, regulatory uncertainty persists. While the Trump administration is crypto-friendly, stablecoins touch on cross-border payments and financial stability—areas likely to attract extra scrutiny from the Federal Reserve and Treasury Department. Moreover, the Trump family’s involvement may turn USD1 into a political lightning rod, amplifying policy risks.
The Ripple Effects of USD1
The launch of USD1 is more than just another crypto experiment by the Trump family—it could have far-reaching implications for the entire market:
Impact on the Stablecoin Landscape:
USD1’s entry will intensify competition among stablecoins. Although initially targeting institutional clients, if it gains traction and expands its user base, USD1 could threaten the dominance of USDT and USDC. Particularly, USD1’s association with the Trump family’s political clout may draw attention from traditional financial institutions and sovereign wealth funds, potentially accelerating stablecoin adoption in cross-border payments and DeFi.
However, market expert Kevin Lehtiniitty cautions: “Launching a stablecoin is easy, but building a widely adopted ecosystem is much harder.”
It remains unclear whether the Trump family will collaborate with or compete against other American firms in this space.
Potential Impact on Dollar Hegemony:
Both the Trump administration and WLFI argue that USD1 strengthens the U.S. dollar’s global dominance. As demand for dollar-backed stablecoins grows worldwide, USD1 could become a new tool for dollar digitization, further boosting the greenback’s role in international trade and payments.
Yet, widespread stablecoin adoption may also disrupt traditional finance. Their efficient cross-border capabilities could undermine existing financial intermediaries and erode trillions of dollars in revenue from short-term fixed-income markets.
Overall Impact on the Crypto Market:
The Trump family’s involvement brings renewed visibility to crypto. USD1 could lure more traditional investors into the space, pushing crypto further into the mainstream. Combined with the administration’s pro-innovation stance, this may catalyze new projects and increase market activity. But risks remain.
Their participation may amplify speculative sentiment, increasing price volatility. $TRUMP serves as a cautionary tale—its price peaked on January 19, 2025, then fell over 80%, highlighting investor speculation around Trump-linked projects. If USD1 fails to manage expectations, it could face similar turbulence.
Driving the DeFi Ecosystem:
One of USD1’s goals is to become integral to the DeFi ecosystem. WLFI plans to partner with platforms like Aave and Chainlink to develop a decentralized finance platform accessible to everyday users. If USD1 gains a foothold in DeFi, it could channel more institutional capital into the space and significantly expand the market’s scale.
Conclusion
The Trump family’s entry into the stablecoin arena via USD1 represents both an expansion of their business empire and a bold fusion of politics and finance. With its institutional focus, compliance framework, and political backing, USD1 has the potential to carve out a niche in the crowded stablecoin market. Yet, given intense competition and a complex regulatory landscape, its long-term success remains uncertain.
For the broader crypto market, USD1’s debut could mark a turning point. It may reshape the stablecoin hierarchy and accelerate the digitization of the dollar and growth of DeFi, paving the way for wider crypto adoption. At the same time, the Trump family’s involvement introduces new risks—conflicts of interest, market speculation, and regulatory ambiguity.
Whether USD1 will truly shake up the market remains to be seen.
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