Trump’s World Liberty Financial crypto venture to launch stablecoin

Donald Trump’s World Liberty Financial to Launch US Dollar-Pegged Stablecoin

[LONDON] Donald Trump’s World Liberty Financial crypto venture will launch a US dollar-pegged stablecoin, it said in a statement on Tuesday, after raising more than half a billion US dollars from selling a separate digital token.

Stablecoin Details

The stablecoin, called USD1, will be fully backed by US Treasuries, US dollars, and other cash equivalents and is designed to keep a value of US$1, World Liberty said in the statement. US dollar-pegged stablecoins such as Tether and USDC have ballooned in recent years and now act as a key cog in the multi-trillion US dollar crypto trading industry, helping move funds between different cryptocurrencies or into regular cash.

Market Size and Growth

Stablecoins in circulation currently total over US$237 billion, according to data provider CoinGecko. The tokens have become lucrative for their issuers in recent years as interest rates spiked. Tether, the issuer of the world’s biggest stablecoin, made over US$13 billion in profits last year.

Market Competition

USD1 will face stiff competition from incumbents such as Tether and US firm Circle, the issuer of USDC, said Kevin Lehtiniitty, CEO of New York payments infrastructure firm Borderless.xyz. "While launching a stablecoin is easy, building an ecosystem that adopts it is a far harder task," he said. "Is the President competing with other American businesses or will they find ways to partner?"

Partnership with BitGo and Binance

USD1’s reserves will be held in custody by California-based BitGo, World Liberty said. BitGo’s prime brokerage service will support USD1 by "providing institutional clients with access to deep liquidity and trading," it added. USD1 will be launched on the Ethereum and Binance Smart Chain blockchains – digital ledgers that underpin the movement of crypto coins. World Liberty plans to launch USD1 on other blockchains in the future, it added.

Binance’s Role

Binance, the world’s biggest crypto exchange, launched its so-called Smart Chain in 2020. It is the world’s fourth-largest blockchain by the value of assets held on it, according to CoinGecko. Binance’s founder and former CEO Changpeng Zhao was last year sentenced to four months in a US prison, after pleading guilty to violating US laws against money laundering.

Conclusion

Donald Trump’s World Liberty Financial is set to launch a US dollar-pegged stablecoin, USD1, which will be fully backed by US Treasuries, US dollars, and other cash equivalents. The stablecoin will be launched on the Ethereum and Binance Smart Chain blockchains and is expected to face stiff competition from incumbents such as Tether and USDC.

Frequently Asked Questions

Q: What is the purpose of the USD1 stablecoin?
A: The USD1 stablecoin is designed to keep a value of US$1 and is intended for use in cross-border transactions.

Q: How will USD1 be backed?
A: USD1 will be fully backed by US Treasuries, US dollars, and other cash equivalents.

Q: Who will hold the reserves of USD1?
A: The reserves of USD1 will be held in custody by California-based BitGo.

Q: Which blockchains will USD1 be launched on?
A: USD1 will be launched on the Ethereum and Binance Smart Chain blockchains, with plans to launch on other blockchains in the future.