Key Takeaways
- World Liberty Financial unveiled the USD1 stablecoin in March.
- An Abu Dhabi firm has chosen to use USD1 for a $2 Billion MGX investment in Binance.
- Use highlights World Liberty’s growing clout in the crypto industry.
An Abu Dhabi state-backed Investment firm will use USD1 Stablecoin, a dollar-backed digital asset launched by US President Donald Trump’s crypto venture, World Liberty Financial.
According to Zach Witkoff, co-founder of World Liberty Financial, USD1 would be used to close the $2bn investment by Abu Dhabi-based MGX into Binance, the world’s biggest crypto exchange. Witkoff made the statement when he appeared alongside President Donald Trump’s son, Eric Trump, at the Token 2049 crypto convention in Dubai this week. Witkoff said:
“We are excited to announce today that USD1 has been selected as the official stablecoin to close MGX’s $2 billion investment in Binance […] We thank MGX and Binance for their trust in us, and I think it’s only the beginning.”
The Identity of Its Major Holders Is Unclear
The USD1 stablecoin is one in a series of Trump family crypto-related ventures, including a “meme coin” launched in January and a crypto mining venture that has drawn criticism from government ethics experts and political opponents over potential conflicts of interest. The decision by the Abu Dhabi firm to use the recently launched USD1 stablecoin highlights the growing significance of the global cryptocurrency industry. The USD1 stablecoin will be issued on the Binance blockchain.
As cryptocurrencies become mainstream global finance, stablecoins are slowly becoming essential to global crypto trading. Stablecoin issuers generally profit by earning interest from the treasuries and other underlying assets. According to data from CoinMarketCap, the value of USD1 in circulation reached about $2.1bn, meaning it’s one of the fastest-growing stablecoins. The identity of its major holders, however, remains unclear. Online data from crypto analyst firm Arkham Investment shows that an anonymous cryptocurrency wallet with $2bn worth of USD1 received the funds between 16 and 29 April.
Sharp Criticism from Legislators
Democratic Senator Elizabeth Warren is among the legislators who have sharply criticized the President’s crypto venture and pending US legislation on stablecoins before the Republican-controlled Senate. Commenting on the growing list of Trump-backed crypto ventures and the ongoing plans for stablecoin regulation, Warren, who is a member of the US Senate Banking Committee, said:
“A fund backed by a foreign government just announced it will make a $2 billion deal using Donald Trump’s stablecoins […] Meanwhile, the Senate is gearing up to pass the ‘GENIUS’ Act – stablecoin legislation that will make it easier for the President and his family to line their pockets. This is corruption, and no senator should support it.”
Conclusion
Zach Witkoff claims that World Liberty Financial’s USD1 coin, backed “one-to-one by short-term treasuries and cash equivalents,” will become “the most transparent, the most regulated, stablecoin in the world.” A New York Times report states that the Trumps and the Witkoffs have raised at least $550 million for World Liberty Financial coins together.
Frequently Asked Questions
What is the world’s largest Stablecoin?
Tether, the world’s largest stablecoin issuer, is preparing to launch a U.S.-based stablecoin as soon as this year.
What is the price of a USD1 stablecoin today?
USD1 (USD1) is $1 today, with a 24-hour trading volume of $4,788.40.
Are stablecoins regulated in the US?
The US doesn’t have a law specifically regulating stablecoins; they are subject to various forms of regulation, including potential state and federal oversight. Congress is actively considering legislation like the GENIUS Act and STABLE Act to establish a more transparent regulatory framework for stablecoins.
