365Crypto
Trump’s Crypto Project Sparks Concerns
The Trump family’s crypto venture, World Liberty Financial (WLFI), is diving deeper into the digital asset world. Now, they’re planning to launch a stablecoin, and people are worried.
Critics say this move could create serious conflicts of interest. After all, having the sitting U.S. president involved in a financial product like this? That raises a lot of eyebrows.
WLFI’s past actions haven’t exactly helped its reputation. Just before Donald Trump’s inauguration, the group launched a memecoin. Prices shot up and then crashed. Many called it a classic “pump-and-dump” scheme.
They’ve also made some suspiciously well-timed crypto investments. Right before the White House Crypto Summit on March 7, WLFI bought $20 million worth of digital tokens. Convenient timing? You decide.
A Stablecoin Backed by U.S. Treasuries?
On March 25, WLFI announced its new stablecoin: USD1. They claim it’s backed 100% by U.S. government treasuries, dollar deposits, and similar assets.
Zach Witkoff, WLFI’s co-founder, says the coin is perfect for “seamless, secure cross-border transactions.” Sounds good on paper, but experts see a problem.
The Trump family owns 60% of WLFI. That means they could directly profit from USD1, even while Donald Trump holds office. Some argue this violates the U.S. Constitution’s emoluments clause, which stops government officials from benefiting financially from foreign entities.
Cyber law expert Andrew Rossow calls it a “direct affront to constitutional safeguards.”
Foreign Influence and Market Manipulation?
Regulators fear this stablecoin could open the door to foreign influence over U.S. policy. If overseas investors start using USD1, they might gain leverage over Trump’s administration.
Corey Frayer, a former SEC official, says this is a major concern. “There’s a lot of secrecy in the crypto world,” he says. He worries that bad actors could use USD1 to move money without oversight.
The project has already caught the attention of lawmakers. Back in January, when Trump launched his memecoin, Rep. Maxine Waters sounded the alarm. She warned that even sanctioned individuals could trade $TRUMP on unregulated platforms.
A Threat to Financial Stability?
Beyond legal concerns, some say USD1 could shake up the financial system in a bad way.
Heath Mayo, founder of the Principles First movement, says a sitting president issuing a stablecoin is dangerous. He believes it’s an abuse of taxpayer-backed credit and could create financial instability.
Rossow takes it even further. He says Trump’s role in the stablecoin industry is a “constitutional violation” that could lead to unfair advantages for his supporters.
Can Anyone Stop This?
Senator Elizabeth Warren is already pushing for an ethics probe. She says Trump’s crypto projects have personally enriched him while allowing the industry to funnel money his way.
But will anything actually happen? Hard to say. The probe seems to be going nowhere, and Congress is busy working on the GENIUS Act—Trump’s proposed crypto legislation.
Some experts believe government agencies like the Financial Crimes Enforcement Network (FinCEN) could step in. They say state regulators could also take action, especially in states with strong consumer protection laws.
Others think foreign governments might pressure the U.S. to regulate stablecoins more strictly. After all, crypto is a global game.
Not Everyone Thinks It’s a Problem
While some see USD1 as a serious issue, others think it’s just another sign that crypto is going mainstream.
Chris Barrett from Chainlink says, “The world runs on the U.S. dollar, and stablecoins will only make that harder to change.”
Arnoud Star Busmann, CEO of Quantoz Payments, believes the stablecoin is proof that major brands are embracing crypto.
Meanwhile, the Blockchain Association—one of the biggest crypto lobbying groups—has stayed silent on the issue.
